Tentative Agreement Between UAW and Stellantis Adds Over 5,000 Jobs, Follows Ford’s Framework

by Michael Nguyen
Stellantis-UAW Contract Agreement

Stellantis, the automaker behind the Jeep brand, has entered into a preliminary contract with the United Auto Workers (UAW) union, adopting a structure similar to an earlier agreement struck with Ford. The confirmation of the accord came from UAW President Shawn Fain, who appeared in a video broadcast on Saturday evening. He stated that the agreement still awaits the approval of 43,000 company members through a vote.

The tentative agreement brings an end to a six-week labor strike involving approximately 14,000 UAW members at two Stellantis production facilities in Michigan and Ohio, as well as multiple parts distribution centers nationwide. The workers were instructed to cease picketing and return to their jobs.

The deal outlines a 25% wage increase over the forthcoming four and a half years for senior assembly plant workers, with an initial hike of 11% upon ratification. Additionally, workers will receive cost-of-living adjustments, which will escalate the overall wage increase to an aggregated 33%. Under this new contract, top-level assembly plant employees at Stellantis will earn upwards of $42 per hour, compared to the current rate of approximately $31 per hour.

The agreement, paralleling the one with Ford, is slated to remain effective until April 30, 2028. As part of the contract, the union announced that it managed to preserve jobs at multiple facilities, including an assembly plant in Belvidere, Illinois, initially earmarked for closure. Also retained were jobs at an engine factory in Trenton, Michigan, and a machining facility in Toledo, Ohio.

President Fain lauded the achievements of the union, stating, “We have accomplished what seemed unattainable. We have successfully reopened a shuttered assembly plant.”

In a commitment to future manufacturing, Stellantis has pledged to produce a new midsize truck at its Belvidere plant, which had been slated for closure. The union revealed that 1,200 existing employees would be reinstated and an additional 1,000 would be employed at a new electric vehicle battery facility.

Vice President Rich Boyer, who spearheaded the negotiations with Stellantis, said that the workforce at the Toledo, Ohio, machining plant would be doubled. The union secured investments totaling $19 billion across the United States.

Initially, Stellantis had proposed eliminating 5,000 U.S. jobs; however, the labor strike led to a reversal, resulting in a commitment to add 5,000 jobs by the end of the contract term.

The development leaves General Motors as the only major automaker without a ratified contract with the UAW. A strike initiated at GM’s Spring Hill, Tennessee facility on Saturday night aims to expedite negotiations, according to two sources familiar with the matter who requested anonymity.

The UAW stated that the Stellantis deal represents gains fourfold greater than those achieved in the 2019 agreement. Under the new terms, a senior assembly plant worker’s base wage will see its most significant increase in over two decades. Starting salaries for newcomers will surge by 67%, inclusive of cost-of-living adjustments, exceeding $30 per hour. Temporary workers are set for increases exceeding 165%, and workers at parts centers will witness an immediate 76% pay hike upon ratification.

As with the Ford contract, it will take a mere three years for newly hired workers to ascend to the pinnacle of the assembly pay scale.

The UAW has also gained the ability to strike over potential plant closures and unfulfilled commitments on product and investment by Stellantis.

U.S. Democratic Representative Bill Foster, who represents Belvidere, indicated that the production of electric vehicles at the plant is likely. Earlier this year, the facility had been indefinitely shuttered.

Bruce Baumhower, local union president at a significant Stellantis Jeep factory in Toledo, Ohio, anticipates that the agreement will pass due to the generous pay increases.

Despite some dissatisfaction among union members who expected higher wage gains, the overall sentiment regarding the preliminary agreement has been optimistic, both within and outside of Stellantis facilities.

The UAW and Stellantis initiated rigorous negotiations on Thursday, immediately following the announcement of the Ford deal, and finalized terms on Saturday.

More than 14,000 GM employees remain on strike, affecting factories in Texas, Michigan, Missouri, and Tennessee.

The labor action began on September 15, when union contracts with all three major automakers expired. At its zenith, the strike involved around 46,000 workers across all companies, constituting about one-third of the UAW’s 146,000 members working for the Detroit-based Big Three. Supply chain disruptions prompted additional layoffs during the strike.

Under the Ford agreement, retired workers with pensions will see marginal increases, and those employed post-2007 with 401(k) plans will receive significant hikes. The Ford deal also included the right to strike over plant closures and substantial raises for temporary workers.

Union leaders in other sectors, including Hollywood writers and Teamsters representing UPS workers, have also succeeded in negotiating increased wages and benefits in recent months, staving off extended strikes.

The mood is high among striking workers outside the Stellantis Sterling Heights plant. Many express enthusiasm about the tentative agreement and the prospect of resuming work.

“The initial agreement is exemplary,” said Anthony Collier, 54, of Sterling Heights, Michigan. “Given that it is expected to align with Ford’s, there’s keen interest in ratification. The financial strain of the strike has been felt by many.”

Contributions to this report were made by AP Business Writer Haleluya Hadero from Jersey City, New Jersey, and AP Staff Writer Corey Williams from Sterling Heights, Michigan.

Frequently Asked Questions (FAQs) about Stellantis-UAW Contract

What companies are involved in the tentative contract agreement?

Stellantis and the United Auto Workers (UAW) union have reached a tentative contract agreement.

What template does the Stellantis-UAW contract follow?

The contract follows a template that was set earlier in the week by Ford.

How many UAW workers were on strike and where?

Approximately 14,000 UAW workers were on strike at two Stellantis assembly plants in Michigan and Ohio, as well as several parts distribution centers across the country.

What is the duration of the tentative agreement?

The agreement, if ratified, would run through April 30, 2028.

What does the agreement mean for workers’ wages?

The pact includes a 25% general wage increase over the next 4 1/2 years for top assembly plant workers, with an initial 11% increase upon ratification. Cost-of-living adjustments will bring the raises to a compounded 33%.

Are there any job provisions in the agreement?

Yes, the union claimed to have saved jobs at plants in Belvidere, Illinois; Trenton, Michigan; and Toledo, Ohio. Additionally, around 1,200 workers will be rehired, and another 1,000 new workers will be added for a new electric vehicle battery plant.

What is the total worth of investment won by the union across the U.S.?

The union has won $19 billion worth of investment across the U.S. as part of the deal.

What will happen to General Motors in light of this agreement?

The deal leaves General Motors as the only major automaker without a contract with the union. A walkout has started at GM’s facilities in Spring Hill, Tennessee.

How do the terms of this new contract compare to the previous one?

The UAW stated that the Stellantis agreement offers gains that are worth more than four times the improvements in the 2019 contract. For instance, starting wages for new hires will rise 67%, including cost-of-living adjustments.

What are some immediate reactions from workers and union leaders?

Workers and union leaders have generally reacted positively, stating that the tentative agreement brings substantial pay raises and job security. Some even called it a “historic agreement.”

More about Stellantis-UAW Contract

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Nancy White October 29, 2023 - 2:19 am

A 25% wage increase and 5,000 new jobs, what’s not to like? But I wonder what this means for car prices. Will they go up?

Sarah Smith October 29, 2023 - 6:04 am

I’m glad to see they’re addin jobs and not cuttin em. Kudos to UAW for fighting for the workers.

Dan Brown October 29, 2023 - 7:43 am

Its good for the short term but what about the long term viability? especially with electric vehicles on the rise, hope they thought of that.

Mike Williams October 29, 2023 - 9:32 am

Looks like UAW’s aggressive strategy paid off big time. $19 billion in investment? That’s gotta be historic.

John Doe October 29, 2023 - 10:53 am

Wow, this is big news! A 25% wage increase over the next few years? thats pretty solid if you ask me.

Rachel Green October 29, 2023 - 12:42 pm

Interesting to see how this unfolds for GM. They’re now the only one left without a contract. Wonder what their next move’s gonna be?

Tim Johnson October 29, 2023 - 2:21 pm

Didn’t see this comin, especially with all the labor issues goin on. GM’s now under pressure for sure.

Emily Davis October 29, 2023 - 3:01 pm

This is a win for everyone I guess. Not just the workers but also for those cities where the plants were gonna close. Jobs are saved, that’s something.

Alan Clark October 29, 2023 - 11:34 pm

I’m just relieved. My brother works at the Trenton plant. said he’s going back to work next week. About time!


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