GM, Stellantis work to reach UAW contract deals

By David Shepardson and Joseph White

(Reuters) -General Motors and Chrysler parent Stellantis. were in intensive talks on Thursday with the United Auto Workers in an effort to end a six-week-old strike a day after Ford Motor reached a tentative contract deal.

Ford on Wednesday was the first of Detroit’s Big Three car manufacturers to negotiate a settlement to strikes joined by 45,000 workers since mid-September, a deal that will likely set a pattern for reaching deals with GM and Stellantis.

The UAW was meeting with both GM and Stellantis on Thursday and both were working to reach agreement, sources said. Sources briefed on the matter say GM and the UAW are fairly close on economic issues.

GM CEO Mary Barra and UAW President Shawn Fain took part in talks on Thursday and people briefed on the discussions think a deal could be reached as early as later in the evening but cautioned that nothing was final.

The Ford agreement, which still must be ratified by union members, includes a 25% wage hike over the life of the 4-1/2-year contract, a boost in retirement contributions, and the elimination of lower-pay tiers for workers in certain parts operations at Ford. It also reduces the time to get to top pay to three years from eight, and the UAW won the right to strike over plant closures.

Ford Chief Financial Officer John Lawler told reporters the strike had cost the automaker $1.3 billion in earnings and 80,000 vehicles. “The restart of this will be complex,” Lawler said of returning the three idled assembly plants to production.

Lawler said the labor deal will add $850 to $900 per vehicle in higher labor costs for U.S. production.

The UAW told Ford workers they would return to work before ratification.

The Ford contract stands as a significant victory for labor, one of many reached this year as workers have walked out or threatened strikes in various industries such as rail, entertainment, shipping and casinos.

One big issue remains the fate of battery plant workers, which the UAW did not discuss in outlining the deal on Wednesday.

Last month, Ford CEO Jim Farley accused the UAW of holding the labor deal “hostage” in a bid to force the automaker to pay workers at new battery plants the same top wages as workers at assembly plants.

The agreement reverses concessions the union agreed to in a series of contracts since 2007, when GM and the former Chrysler were skidding toward bankruptcy, and Ford was mortgaging assets to stay afloat. But it is still less than the 40% pay hike, 32-hour-work week and return of defined benefit pensions the UAW initially sought.

The companies are collectively in a better position now, though they have all stated that excessive pay increases would hamstring their ability to compete in coming years against lower-cost manufacturers, including Tesla, the leading seller of electric vehicles.

The deal amounts to total pay hikes of more than 33% when compounding and cost-of-living mechanisms are factored in, the UAW said.

“We know it breaks records,” UAW President Shawn Fain said in a video address on Wednesday night. “We know it will change lives. But what happens next is up to you all.”

The UAW told Ford workers now on strike to return to their jobs during the ratification process. That means production of Ford Super Duty pickups, Ford Bronco and Explorer SUVs and Ranger trucks could restart this week.

“We are pleased to have reached a tentative agreement on a new labor contract with the UAW covering our U.S. operations,” Farley said.

(Reporting By David Shepardson in Washington and Joseph White in DetroitAdditional reporting from Abhirup Roy in San FranciscoWriting by David GaffenEditing by Mark Porter, Jonathan Oatis and Matthew Lewis)