UAW reaches tentative agreement with Stellantis, expands strike at GM
New York (CNN) — The United Auto Workers union came to a tenative agreement with Stellantis Saturday. But it expanded the strike against General Motors, America’s largest automaker and the last remaining Big Three holdout, dashing hopes it was close to ending the last remaining auto strike.
The deal with Stellantis, which makes vehicles under the Dodge, Ram, Chrysler and Jeep brands, was announced Saturday by UAW President Shawn Fain and Vice President Rich Boyer, the union’s chief negotiator in the talks. They hailed it as a major victory, as the tentative agreement includes the revival of an Illinois assembly plant that was closed in February, originally putting 1,200 people out of work, along with other wins for the union.
“On Day 44 of our Stand Up Strike, I am honored to announce that our union is again victorious. Once again, we’ve achieved just weeks ago what we were told was impossible,” Shawn Fain said in a video posted to X, formerly known as Twitter.
The 14,600 UAW members who have been on strike at Stellantis will be returning to work within days. But nearly 4,000 GM factory workers that build Cadillac and GMC SUVs in Spring Hill, Tennessee, joined the strike at 5 pm CT.
“We are disappointed by the UAW’s action in light of the progress we have made,” GM said in a statement about the strike’s expansion. “We have continued to bargain in good faith with the UAW, and our goal remains to reach an agreement as quickly as possible.”
Fain made no mention of the talks with GM or explain the decision to expand the strike there. The union posted a brief statement on X: “The UAW expanded its strike against the third company, ordering workers to walk out of GM’s Spring Hill Assembly Plant in Tennessee.”
It has expanded the reach of the strike five times previously since it started on September 15 in an effort to increase pressure on the Big Three. This is the first time Fain wasn’t the one announcing the expansion, and the first time the union did so without saying why the step was being taken.
The UAW National Stellantis Council will vote on whether or not to send the tentative agreement to the broader membership on November 2, Fain said. After that, the 43,000 rank-and-file UAW members at the company will get a chance to vote on whether to ratify the deal. It needs to be ratified by both in order to go into effect.
The tentative agreement with Stellantis on Saturday follows a similar deal reached with Ford on Wednesday. The Ford deal also still needs to be ratified by rank-and-file members at Ford before it can go into effect, just as the Stellantis deal will need the approval of membership as well.
Many of the details of the agreement with Stellantis are not yet known. But the pay is along the same lines as the Ford deal, which would mean an immediate minimum 11% raise, and additional pay increases that would bring total raises to 25% during the four-and-half year life of the contract. It is also expected to include a cost-of-living adjustment (COLA) to wages to protect members against rising prices.
The COLA was something the union gave up when Stellantis predecessor Chrysler was in dire straights, and headed towards bankruptcy and a federal bailout. But Stellantis has seen a recent boon, with the company now making record profits. The guaranteed wage increases, combined with COLA, could raise total wages by more than 30% during the life of the contract.
But the biggest surprise in the Stellantis deal is that the UAW said that the company has agreed to re-open a plant in Belvidere, Illinois, which had closed February 28, putting 1,200 workers out of work. The plant will be getting a midsize truck to replace the Jeep Cherokee compact SUV that had been built there.
“We’ve done the impossible. We have moved mountains. We have reopened an assembly plant the company has closed,” Fain said.
Stellantis and Ford’s deals give union workers sizeable pay and benefits increases to contend with inflation that has taken a bite out of workers paychecks. The last contract was reached in 2019, before runaway price hikes began in the wake of the pandemic.
The automakers typically offer union members similar deals across companies, so the GM negotiations are expected to yield similar benefits for the autoworkers.
Fain said the union also won promises of new products for two other plants that had been faced with possible closure in the future – an engine plant in Trenton, Michigan, and a machining plant in Toledo, Ohio, that makes parts for transmissions, among other products. Neither engines nor transmissions are needed in electric vehicles.
The union is concerned that the jobs of workers making engines, transmissions, and other parts of cars no longer needed for EVs could be eliminated as automakers change their vehicle lineups from gas-powered cars to electric propulsion.
Fain said the company came into talks with plans to cut 5,000 more UAW-represented jobs during the life of the contract. He said with the product commitments that Stellantis agreed to in this contract, it will instead increase the UAW headcount at the company by 5,000 under the terms of the tentative agreement.
If agreements with all of the Big Three are reached and ratified, it would likely put an end to the longest autoworkers strike in 25 years.
Ford deal may have served as a template
In addition to the pay increases in the Ford deal, the union has also won improved pension benefits for senior workers who have a traditional pension plan, and increased company contributions to 401(k) accounts of workers hired since 2007. But the union did not get its goal of a resumption of traditional pension plans for those post-2007 hires, or for a return of retiree health care coverage.
The union also won improved job guarantees, including the right to go back on strike to protest a plant closing during the life of the contract. Previous contracts always included a no-strike clause while the contract is in effect.
The ratification process at Ford is due to start Sunday with a meeting in Detroit of local union officials who represent company workers around the country. While the deal includes record gains for the union, with double-digit pay increases, ratification is not certain. A similar process will begin Thursday for Stellantis.
When will the strike end?
Generally a union will not have strikers return to work until a tentative labor agreement has been ratified. But the UAW had workers return to work at Ford while the ratification process is underway. That stepped up pressure on GM and Stellantis to quickly reach their own deals with the union.
“The last thing they want is for Ford to get back to full capacity while they mess around and lag behind,” said UAW Vice President Chuck Browning, the union’s chief negotiator at Ford, in comments to members Wednesday night.
Some members have already returned to work at Ford as the company prepares to resume operations, said Todd Dunn, UAW Local 862 president, who represents workers at Kentucky Truck Plant, Ford’s largest factory. Others are due back on Saturday. The plan is that by Monday, the plant will be running at full capacity, he said.
With tentative agreements at Ford and Stellantis, it appeared as if the strike may have come to a complete resolution relatively soon. But the expansion of the strike at GM makes things more murky for the coming days, however.
A new strategy for the union
The union has been on strike since September 15 against GM, Stellantis and Ford, the first time the union has ever struck all three companies at once. The union represents 145,000 workers between the three companies, but it did not have all of its members go on strike.
Instead, it has been conducting targeted strikes at specific plants. It began with 12,700 members walking out at one assembly plant at each company, and it has expanded the scope of the strike five times since then. At the time the Ford deal was announced, there were 16,600 members on strike at Ford, 14,200 on strike at GM and 14,600 on strike at Stellantis.
Most recently the union had 6,800 members walk out at the Stellantis plant in Sterling Heights, Michigan, on Monday, and 5,000 members go on strike at the largest GM plant in Arlington, Texas, on Tuesday, shortly after GM reported stronger than expected quarterly earnings.
In its earnings report, GM reported that it lost $200 million over the first two weeks of the strike in late September, and it lost another $600 million in the first three weeks of October. But the closing of the Arlington plant alone is likely to cause losses of an additional $130 million a week, according to an estimate from Colin Langan, an auto analyst with Wells Fargo.
Stellantis has not given a loss estimate from the strike, but Langan estimates the Sterling Heights plant being on strike raises its weekly losses by $110 million a week to $200 million.
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