Union contracts with Detroit’s Big Three now in hands of UAW members

UPDATE: Union members at General Motors, Ford and Stellantis have voted to ratify the tentative contracts described in this story. The agreements will last until May of 2028.

The United Auto Workers national leadership has signed-off on tentative deals with General Motors, Ford and Stellantis. That means each preliminary contract is now in the hands of local union chapters, where rank-and-file are reviewing the terms and casting their votes on whether to ratify.

Listen: A look at the tentative auto contracts UAW members are reviewing.

Money

All three deals are headlined by items like a three-year progression to top pay, 25% wage increases over the four-and-a-half-year contract and the return of cost-of-living adjustments. UAW President Shawn Fain says that should add up to big gains for workers.

“The top wage will increase by about 33%,” says Fain, “from $32.32 an hour to $42.95 an hour.”

Hourly rates would instantly rise by at least 11% when each new contract goes into effect. After that, there would be 3% annual increases with a 5% bump in the final year of the deals.

“Upon ratification, members will receive a $5,000 lump sum ratification bonus.” — Chuck Browning, UAW vice president

All three agreements include an end to the tiered wage system. As a result, some of the most impacted workers could see an instant pay raise of more than 70%.

There’s also a signing incentive for all members, as union Vice President Chuck Browning explains.

“Upon ratification, members will receive a $5,000 lump sum ratification bonus,” said Browning. “For the first time ever, that will include temporary workers as well.”

Temp workers

Temporary workers are being promised things like profit sharing benefits. At ratification all temps at General Motors and Ford with at least 90 days on the job will become permanent hires.

That guarantee is not being made at Stellantis, where about 3,000 temps would be converted in the new agreement’s first year. After that, all temporary employees at Detroit’s Big Three would become full time after nine months of work, said Fain.

“Temps at the Big Three have been abused and exploited,” he said. “Over the life of the contract, some Stellantis current temps will see raises of up to over 168%.”

Retirement

UAW leaders have frequently demanded a return to traditional pensions. It’s something the union gave up years ago when Detroit’s vehicle manufacturers were in deep financial trouble.

Despite the rhetoric, union negotiators have been unable to secure those pensions. Fain acknowledges that’s an area where the union lost.

“The Big Three,” Fain said, “being so driven by Wall Street, refused to have the liability on their books. But it’s not just the cost — it’s the Wall Street influence of not taking on any future obligations to our members. So already we’re looking at 2028 for this issue.”

Fain says positioning the UAW for success in future negotiations has been a goal during this bargaining cycle. The tentative deals do include retirement gains, however, with all three agreements making similar retirement promises.

Existing retirees at GM, Ford and Stellantis would receive annual bonuses under the new contracts, while employer 401K contributions will rise to 10%.

“If you’re at top rate right now, Ford puts about $6,300 into your 401k each year,” Browning said. “At the end of this agreement, when you’re at top rate, Ford will put $11,000 into your 401K each year.”

Browning says that’s an increase of more than 70% over the current deal.

Industry impact

Ford, Stellantis and General Motors executives were vocal throughout negotiations that UAW contract demands threatened the financial stability of the automakers. Now that tentative agreements have been reached, none of the Big Three have elaborated on how the new terms could impact them but have all said the strike has been costly.  Natalie Knight is chief financial officer at Stellantis.

“The combined negative impacts of our shipments was around 50,000 units in September and October,” said Knight, “with an associated net revenue impact of three billion euros.”

That’s a loss of about $3.2 billion USD. UAW rank-and-file have returned to assembly lines and warehouses while the ratification process takes place.

It will take a majority rule membership vote to ratify each of the three contracts. Otherwise, bargaining teams would return to the table to modify the terms.

Editor’s note: Some employees of WDET are members of UAW Local 1979 — a different bargaining group that’s unaffected by these negotiations.