After more than six weeks of expanding strikes, financial losses and mounting pressure, the United Auto Workers union has concluded its historic series of rolling strikes against the Detroit Three. Shortly after announcing massive escalations last week, Ford F inked a tentative agreement with the union Oct. 25. Three days after Ford folded, Stellantis STLA agreed to tentative terms as well.
And after a strike expansion on Oct. 28, General Motors GM, according to sources familiar with the matter, on Monday made a tentative agreement with the union. Both the union and automaker have yet to officially announce the agreement and subsequent strike stoppage.
The deal with Ford grants auto workers 25% raises over the course of the contract, starting with an 11% raise and a $5,000 bonus immediately upon ratifying the contract. The deal additionally includes cost-of-living adjustments, enhanced profit-sharing, better retirement contributions and around $8.1 billion in new plant investments, according to the UAW.
Related: After $8 billion success, auto union targets Tesla, other automakers
While full details of the Stellantis deal have yet to be unveiled, in broad strokes, it mirrors the contract the union achieved at Ford.
The agreements come in the wake of both Ford and GM pulling their full-year guidance due to uncertainty caused by the strike. Ford said last week the strike caused the company to lose more than $1.3 billion; GM's own losses are not too far below that number.
Anderson Economic Group estimated that, after five weeks of strikes, the action and constant expansion caused the industry to lose a total of more than $9 billion, the bulk of which came in losses for the automakers. The strike additionally impacted suppliers and the supply-chain economy, and resulted in hundreds of millions in lost wages.
“Once again, we have achieved what just weeks ago we were told was impossible,” union President Shawn Fain said in a statement. “At Stellantis in particular, we have not only secured a record contract, we have begun to turn the tide in the war on the American working class."
The path forward
Former Ford CEO Mark Fields, speaking to CNBC Monday, called the new deal a "very rich contract," saying that it allows the workers to "recoup" in the wake of a challenging, inflationary economic environment.
Going forward, Fields said, the automakers are going to have to closely examine their production processes, looking for ways to increase efficiencies to make up for the added labor cost that will result from the new deals. Ford, for example, said that the contract would make each vehicle the company produces around $900 more expensive.
"Automation in the plants is now going to look a lot more compelling," Fields said, noting that these coming cost-saving efforts will influence the automakers' "future investment decisions and hiring decisions."
Fields added that the terms of the contract do give the automakers room to explore greater automation. The union did not immediately respond to TheStreet's request for comment on this point.
Related: Former Ford CEO has a blunt warning for the electric vehicle industry
Fields said that, from the perspective of the union, success in this contract will revolve around an expansion of membership by the end of this contract, something the union seems keen on.
After Fain hinted earlier in October that workers at Tesla TSLA, Honda and Toyota are the "UAW members of the future," the union said in a statement Sunday: "When we return to the bargaining table in 2028, it won’t just be with the Big Three, but with the Big Five or Big Six."
Fields said that the likely reason automakers ended up giving in to many of the union's demands centers around a perfect storm of high inflation, recent union popularity and the record profits automakers recently posted.
"Automakers knew they were going to pay up," Fields said, "but it was richer than expected."
Related: Ford stock wobbles as company puts a dollar figure on UAW auto strikes
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