Autoworkers Score Big Wins in New Contracts With Carmakers


A six-week wave of strikes that hobbled the three largest U.S. automakers has put workers on track for new contracts — the third deal, with General Motors, was firming up on Monday — that will deliver the biggest pay raise workers will receive in decades while avoiding a protracted work stoppage that could have damaged the economy.

The separate but similar deals that the United Automobile Workers union reached in recent days with Ford Motor, G.M. and Stellantis, the maker of Ram, Jeep and Chrysler, will be costly for the automakers as they undertake a switch to electric vehicles. The deals could also set the stage for labor strife and demand for higher pay at nonunion automakers like Tesla and Toyota.

The tentative agreements, which must still be ratified by union members, also appeared to be a win for President Biden, who had risked political capital by picketing with striking workers at a G.M. facility in Michigan last month.

“I think it’s great,” the president as he boarded Air Force One Monday morning, shortly after word arrived that G.M. appeared to have followed Ford and Stellantis in reaching a deal with the union. The strike stretched longer than White House officials would have liked, but it appears to have been resolved before causing significant shortages of new cars and trucks that might have frustrated voters already angry about inflation.

“The near-term impact of this strike will be relatively minor,” said Karl Brauer, executive analyst at, an online auto sales site.

But Mr. Brauer warned that, in the long term, Ford, G.M. and Stellantis will have to raise car prices to remain profitable. Their competitors will follow suit to take advantage of the opportunity to earn higher profit margins, he said. “This is going to make cars more expensive,” Mr. Brauer said.

Potentially the most far-reaching effect of the strike could be on manufacturing workers not represented by the U.A.W. The contracts the union negotiated are the latest in a series of prominent victories for organized labor, including Hollywood writers, UPS workers and even some university employees.

Shawn Fain, the president of the U.A.W., portrayed the tentative agreements as a signal for the union to begin organizing drives at Tesla, which dominates the fast-growing electric car business, and foreign-owned companies like Toyota, Honda or BMW that have large U.S. operations. The union will “organize like we’ve never organized before,” Mr. Fain said Sunday.

Companies without unions can expect the U.A.W. to deploy the same hardball tactics that Mr. Fain used against Ford, G.M., and Stellantis, including rhetorical attacks on the multimillion-dollar executive pay and hourly wages that have failed to keep pace with high inflation.

Even if those union campaigns fail, as they often have in the past, they may prompt some employers to pre-emptively give workers raises.

Ford agreed on a tentative pact on Wednesday. Stellantis followed on Saturday. G.M. reached a tentative agreement on Monday, according to two people familiar with the matter who asked to speak on the condition of anonymity to discuss the deal before it was made public. Details of all the agreements had not yet been published, but they all include a 25 percent pay increase over the four and a half years of the contract and provisions to make sure the raises are not eaten up by inflation.

Like the contract the union negotiated with Ford and Stellantis, the tentative G.M. deal would lift the top U.A.W. wage from $32 an hour to more than $40 over four and a half years. That would allow employees working 40 hours a week to earn about $84,000 a year.

The agreements appear to be victories on multiple fronts for Mr. Biden, who has yoked his economic message to his success at delivering for union workers.

Mr. Biden’s brief stint on a U.A.W. picket line last month was a first for a sitting president. He has promised that union workers would benefit from tax credits and other incentives to encourage people to buy electric vehicles. The incentives are only available to cars made in the United States, Canada or Mexico.

The biggest risk to Mr. Biden — that the contract hinders automakers’ competitiveness — is unlikely to manifest before next year’s election.

The union’s contracts with the three automakers expired on Sept. 15. Since then, the union has called on more than 45,000 workers to walk off the job at factories and spare-parts warehouses across the country. The most recent escalation of the strike came on Saturday, shortly after the union reached a deal with Stellantis. On that day, the U.A.W. told workers to go on strike at G.M.’s plant in Spring Hill, Tenn., that makes several sport utility vehicle models.

The strike has halted the production of some of the companies’ most profitable vehicles, including the Cadillac Escalade S.U.V., the Ram 1500 pickup truck and the Ford Bronco S.U.V.

G.M. said last week that the strike had lowered its earnings by about $800 million, before interest and taxes, with part of the impact coming in the third quarter and most in the fourth quarter.

G.M., Ford and Stellantis began negotiating with the U.A.W. in July. The companies have sought to limit increases in labor costs because they already have higher labor costs than automakers like Tesla, Toyota and Honda that operate nonunion plants in the United States.

A Ford executive said last week that the new contract would raise production costs by up to $900 a vehicle. The company said it would provide more details once the contract was ratified by its workers.

The three large U.S. automakers are investing tens of billions of dollars to develop new electric vehicles, build battery plants and retool factories in an effort to catch up to Tesla. In addition to lower labor costs, the electric car company has other advantages over Ford, G.M. and Stellantis including in selling its cars directly to customers rather than through dealers who take a slice of the profit from each sale of a car made by the three established automakers.

“We need to make sure we have a contract that is going to allow us to compete and win in what is a challenging market for E.V.s,” G.M.’s chief executive, Mary T. Barra, said last week.

Jim Tankersley contributed reporting.


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