Ford has called its 20,000 employees back to work now that it has reached a tentative agreement with the United Auto Workers (UAW). The two parties have agreed on a new four-year labor contract that include a 25 percent pay increase for employees over that period, according to Reuters and The New York Times. With the cost-of-living wage adjustments the union has also successfully negotiated, the total pay hikes would amount to 33 percent, the UAW said. In addition to a wage hike, the contract also has stipulations for higher pensions and the right to strike over company plans to close factories.
Based on those rates, the highest-paid employees at Ford will ultimately be earning more than $40 an hour, up from $32, and have a base pay of $83,000 for a 40-hour-a-week workload. Meanwhile, recent hires will see their pay double over the next four years. As The Times notes, Ford initially offered to pay its workers 23 percent more, telling the union that it’s what the company could afford without making big changes to its business. However, the UAW pushed for a bigger percentage and managed to reach this agreement with Ford by having thousands of its workers walk out over the past few weeks.
Approximately 8,700 personnel at the company’s largest truck plant in Kentucky had stopped working, along with another 10,000 in Illinois and Michigan. Around two weeks after the strikes began, Ford suspended the construction of a Michigan battery factory for electric vehicles “until [it’s] confident about [its] ability to competitively operate the plant.”
Ford, like other automakers, are taking steps to electrify its fleet in hopes of having an all electric vehicle lineup over the next 10 years or so. The automakers affected by the strike, which also include GM and Stellantis, previously said that their electrification efforts currently costing them billions of dollars would be affected by the union’s demands. “Toyota, Honda, Tesla and the others are loving the strike, because they know the longer it goes on, the better it is for them,” Ford executive chairman William C. Ford Jr. said. Tesla and the Japanese automakers aren’t unionized, but the UAW argued that its success with the current strikes could give it the momentum it needs to expand and organize at other companies.