Why the UAW’s Ford Deal is Better Than With Other Automakers

November 10, 2015, 6:51 PM UTC
Ford Seeks To End Role As Detroit's Most Generous Automaker
Jimmy Settles, vice president of the United Auto Workers (UAW), left, shakes hands with Bill Ford, executive chairman of Ford Motor Co., left, during the ceremonial start of labor negotiations in Detroit, Michigan, U.S., on Thursday, July 23, 2015. Ford Motor Co., beset by the highest U.S. labor costs in the industry, gets a chance to remedy the imbalance as it opens talks with the UAW on a replacement for the four-year contract that expires Sept. 14. Photographer: Jeff Kowalsky/Bloomberg via Getty Images
Photograph by Jeff Kowalsky — Bloomberg via Getty Images

After negotiations between the United Auto Workers union and Ford Motor Company that began this summer, the two sides reached a tentative contract on Monday.

The over 52,000 union members who work for Ford (F) still have to ratify the deal, but the New York Times reports that it has found strong support among local UAW leaders. The contract promises similar pay increases that were included in both the Fiat Chrysler deal as well as the General Motors contract, which has yet to be approved. It will also eliminate the wage gap between newer hires and more seasoned employees, which UAW president Dennis Williams has made a top priority in contract negotiations.

If the Ford contract is ratified, union members will receive an $8,500 signing bonus, up $500 from GM’s proposed deal and $4,500 from Fiat’s approved deal. In addition to the signing bonus, Ford workers would also receive a $1,500 advance on annual profit-sharing payouts. UAW’s top Ford negotiator, James Settles Jr., is calling this proposal a “hard earned victory.”

Harley Shaiken, a professor at the University of California, Berkeley who has previously worked with the UAW, told the Times that this Ford deal is “a modestly richer agreement” made possible by the fact that Ford did not go bankrupt during the recession and, as a result, has been showing strong results recently.

Regarding negotiations overall, between the UAW and the three Detroit automakers, Shaiken says that the most damaging possibility for these companies would be to come out of negotiations with “disgruntled” employees. He adds, “Some of these workers have been to hell and back in the last decade.”

Ford workers will begin voting on this contract next week.