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Ford agrees to record 25% wage hike in tentative deal to end UAW strike

BENGALURU - Ford Motor and United Auto Workers (UAW) union negotiators reached a tentative labour deal after a six-week strike, UAW president Shawn Fain and the automaker said on Wednesday, agreeing to a 4½-year contract with a record pay boost.

The deal, which needs approval by union leaders and members, would be the first settlement of strikes by 45,000 workers against Ford, General Motors and Chrysler-parent Stellantis that began Sept 15.

Mr Fain said the UAW reached a historic agreement with Ford, including a 25 per cent wage increase over the life of the contract. Ford workers will receive an immediate 11 per cent wage hike. Including compounding and cost of living, worker pay will rise about 33 per cent to over US$40 (S$54) an hour over the life of the contract.

In addition to the general wage hike, Mr Fain said the lowest-paid temporary workers would see raises of more than 150 per cent over the contract term and employees would reach top pay after three years. The union also won the right to strike over future plant closures, he said.

The Ford contract would reverse concessions the union agreed to in a series of contracts since 2007, when GM and the former Chrysler were skidding toward bankruptcy, and Ford was mortgaging assets to stay afloat.

The UAW was preparing to strike at a key Ford facility in Dearborn this week if it had not reached agreement after striking at additional GM and Stellantis facilities this week.

But in an unexpected gesture to Ford, UAW-Ford vice president Chuck Browning said in a video Wednesday that Ford workers now on strike should return to their jobs during the coming ratification process. That means production of Ford Super Duty pickups, Ford Bronco and Explorer SUVs and Ranger trucks could restart this week.

If the Ford contract is ratified, it would set the standard for bargaining at GM and Stellantis and expire on April 30, 2028.

In statements, GM and Stellantis said Wednesday they are working to secure agreements as soon as possible.

“This lays the groundwork for the next two contracts and they should fall in line fairly quickly because all three were within a narrow gap of each other,” Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions.

“The strike so far has been painful for everybody and knowing what it takes to get a signed contract should bring them to the table much quicker,” he said.

The UAW ratcheted up pressure on the automakers by striking at each company’s most profitable plant - GM’s Arlington, Texas assembly plant, Ford’s Kentucky heavy-duty pickup factory and Stellantis’ Ram pickup plant in Sterling Heights, Michigan.

Total economic losses from the auto workers’ strike have reached US$9.3 billon, the Anderson Economic Group said earlier this week.

The UAW’s campaign for a record contract converged with union efforts in Hollywood and at delivery giant UPS to win big pay increases. It also became the focus of attention by US President Joe Biden and Republican rivals who see Michigan and other auto states as pivotal to their 2024 campaign strategies.

Mr Biden joined Mr Fain on a picket line last month, and praised the tentative agreement in a statement on Wednesday night as a “testament to the power of employers and employees coming together to work out their differences at the bargaining table.” REUTERS