After approximately six weeks of targeted labor strikes by the United Auto Workers union, negotiators from the union and Stellantis have reached a tentative deal. Sources that were briefed on the talks indicate that the terms of the agreement have been established, pending approval by UAW leadership. Once the deal is approved by the union, a public announcement is expected to be made on Saturday.
The tentative agreement between the UAW and Stellantis is patterned off the recent 4 ½-year agreement reached with Ford Motor. This agreement, which still needs approval from union leaders and ratification by members, serves as a template for the negotiations with Stellantis.
UAW President Shawn Fain engaged in intense talks with Stellantis on Thursday and Friday before turning his attention to General Motors. Negotiations between UAW and GM are set to resume midday Saturday, with hopes of reaching a similar deal.
Bloomberg News reports that Stellantis has made additional concessions to the UAW during the negotiations. The union aims to announce a tentative agreement, which includes a new product for an idled assembly plant in Illinois.
The tentative agreement is expected to bring an end to the targeted labor strikes that have lasted for six weeks. With the failure to reach new deals for 146,000 UAW members before the September 14 deadline, strikes were initiated by the union.
The recent agreement reached with Ford includes significant benefits for UAW members. Pay increases of 25% over the term of the agreement were secured, with an initial increase of 11%. The top wage is projected to exceed $40 per hour, and starting wages will see an increase of 68% to over $28 per hour. Additionally, cost-of-living adjustments were reinstated, and the path to top wages was shortened from eight years to three. The agreement also grants the union the right to strike over plant closures.
The strikes initiated by the UAW have come at significant costs to automakers, including GM, Ford, and Stellantis. Ford reported that the strike has cost the company $1.3 billion, and if the agreement is ratified, labor costs would increase by approximately $850 to $900 per vehicle produced. GM estimated that the strike has cost them around $800 million.
The proposed agreements between UAW and the automakers are record-setting in nature. Throughout the negotiations, the union exhibited a more confrontational and strategic approach than in recent history. This included initiating negotiations with all three automakers simultaneously, deviating from the traditional approach of bargaining individually with each company. It remains uncertain how much these labor deals will increase costs for the automakers, as they have expressed concerns about the impact on their competitiveness and long-term viability. Deutsche Bank estimates that the Ford agreement alone could result in a cost increase of $6.2 billion over the term of the agreement.
Negotiators have reached a tentative deal between the United Auto Workers union and Stellantis following a series of targeted labor strikes. The agreement, patterned after the deal with Ford Motor, is subject to approval by UAW leadership, with an official announcement expected soon. The strike has resulted in substantial costs for the automakers and has led to record-setting agreements for the union. While the exact impact of the labor deals on the automakers’ competitiveness remains uncertain, it is clear that this process has been significant for both parties involved.