Ford Deal With UAW: How Do Pay Raises Compare To Hollywood Writers, Other Recent Union Wins?

It's the beginning of the end for a six-week-long strike on Detroit automakers as the United Auto Workers (UAW) celebrates a tentative agreement with Ford Motor Co. F which, if ratified, would represent a historic win for automotive employees.

The agreement, disclosed on Wednesday, adds 25% more salary for Ford workers over the span of four-and-a-half years and raises top salaries for production workers to $40 an hour, a 30% jump from a previous 2019 agreement which expired in September.

The agreement is relieving pressure from President Joe Biden's agenda. Biden had taken to the issue personally, joining a UAW picket line in September.

"This tentative agreement is a testament to the power of employers and employees coming together to work out their differences at the bargaining table in a manner that helps businesses succeed while helping workers secure pay and benefits," said Biden in a statement on Wednesday.

Shares of Ford, Stellantis NV STLA and General Motors Co GM, the "Big Three" Detroit automakers, have been on a downward trajectory since striking began on Sept. 15.

Analysts have referred to the strike as the single biggest angle to watch for when looking at Ford's stock performance. The automaker is set to deliver third-quarter earnings on Thursday after the close.

Ford Executive Chairman Bill Ford recently said the real issue wasn’t between Ford and the UAW, but against overseas automotive competitors and emerging Chinese companies. 

What's In The Ford/UAW Contract?

While the full details of the contract are expected to be released by the UAW on Sunday, its main points have already been public. If ratified, it would mean the union's biggest win in decades.

The new Ford agreement automatically increases salaries by 11% upon ratification. The $40 an-hour top salary for production employees would be raised from a current one of $32, and represent an annual pay of more than $83,000 without taking extra hours and bonus pay into consideration.

Under the new agreement, it would take production workers a maximum of three years to reach the top pay, as opposed to the eight years inscribed in the contract which expired in September.

The deal also raises wages for temporary workers as well as improves benefits for UAW-represented retirees.

A historic first for the UAW would be the right to strike over plant closures, which has never been included in a union agreement for auto workers before. Another major win for Ford employees is the inclusion of cost-of-living adjustments, a benefit stopped short in 2009, which is meant to protect workers against inflation.

Will General Motors and Stellantis Follow Suit?

After Ford sent over its deal, pressure began building up around GM and Stellantis to offer their agreements as well. People familiar with the matter told the Detroit Free Press that General Motors was meeting with UAW President Shawn Fain to lock in a tentative agreement, and the union leader is meeting Stellantis leadership in the afternoon. 

In a Wednesday release following Ford's agreement, Stellantis said that its leadership remains "committed to working toward a tentative agreement that gets everyone back to work as soon as possible." 

How Does The Ford Employee Victory Compare To Recent Union Wins?

There have been at least 778 strikes and labor protests so far this year in over 1,090 different locations across the country, according to Cornell University's Labor Action Tracker.

Labor action has been on the rise. In 2022, 224,000 workers went on strike, and that number already surpasses the 320,000 in 2023.

This year, the Writers Guild of America made headlines across the world for an almost five-month-long strike that crippled the entertainment industry and major Hollywood studios such as Walt Disney Co DIS, Comcast Corporation CMCSA, Paramount Global PARAPARAA, Warner Bros. Discovery Inc. WBD and Netflix Inc NFLX.

Late last month, a tentative deal was reached, granting several concessions for Hollywood writers, including increased pay and residual gains from video streaming.

The deal, which was ratified on Oct. 9, included an automatic wage rise of 5% with a 4% and a 3.5% increase in 2024 and 2025, respectively, for an added 12.5% increase over the two years and nine months deal. This compared against 25% for auto workers over four-and-a-half years.

A related actor's strike also affecting Hollywood studios continues to this day as SAG-AFTRA reaches its 105th day on strike.

While the issues affecting auto workers are different from those upsetting writers, one common thread unifies the writers’ strike with the UAW strike: the fear of automation and artificial intelligence taking over human labor. The WGA's deal included specific safeguards against artificial intelligence use impacting writer's pay. The deal prevents studios from firing writers as an effect of the increased use of artificial intelligence in content development.

In August, 340,000 United Parcel Service, Inc. UPS employees, unionized by the Teamsters union reached a deal which averted a strike. The deal raised base pay for UPS workers by a minimum of $7.5 an hour over its five-year term.

In June, workers at Boeing Co BA supplier Spirit AeroSystems Holdings Inc SPR ended a strike by reaching a deal that guaranteed a total wage increase of 9.5% in the first year, a guaranteed increase of 23.5% throughout the four-year contract.

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