Autos

New Ford deal with UAW includes $6 billion in investments, thousands of jobs

Key Points
  • The deal includes $6 billion in new investments from Ford and the creation or retention of 8,500 U.S. jobs, according to the United Auto Workers.
  • Other details of the proposed four-year deal were not disclosed.
  • However, the pact is expected to share many of the same terms as the union's recent contract with General Motors.
Gary Jones, president UAW International, (left) and Bill Ford, executive chairman, Ford Motor, shake hands on July 15, 2019 at Ford World Headquarters to begin negotiations for a new contract.
Ford

DETROIT — Ford Motor and the United Auto Workers reached a tentative deal on a new labor contract Wednesday night without a strike.

The four-year deal includes $6 billion in new investments from Ford and the creation or retention of 8,500 U.S. jobs, according to the union.

Other details of the proposed contract were not disclosed. However, the pact is expected to share many of the same terms as the union's recent contract with General Motors. That deal included 3% raises or 4% lump-sum bonuses each year of the contract, retention of roughly 3% out-of-pocket health-care costs and a path for temporary workers to become full-time employees.

GM also agreed to $11,000 ratification bonuses for most of its roughly 48,000 UAW employees, however, previous contracts have included lower bonuses for Ford and Fiat Chrysler workers.

Ford confirmed the proposed deal, which must be approved by local union leaders and members, but declined to provide further details.

"These were long and hard hours, but I feel confident they were able to secure a contract that protects our member's future," UAW President Gary Jones said in a release announcing the deal.

The union traditionally uses "pattern bargaining" with the Detroit automakers. It selects a "target" company to negotiate with first. Once a deal is agreed upon and ratified, the union uses the contract as a template for negotiations with the other two automakers.

Ford's negotiations with the union were expected to be less contentious and move more quickly than the UAW's talks with GM, which included a 40-day strike that ended Friday and cost the automaker billions.

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The Ford contract is likely at least a week or two away from being approved or rejected by rank-and-file union members. It still needs approval from local union leaders who will meet Friday in Detroit to vote on the deal. If the local UAW leaders approve the proposed contract, Ford's roughly 55,500 UAW members must then vote on it.

If members vote the deal down, negotiators would be expected to return to the bargaining table and a strike would once again be an option for the union.

The UAW, if the deal is ratified, would next turn its attention to Fiat Chrysler, the last of the Detroit automakers the union needs to negotiate with for 2019.

The UAW's discussions with Fiat Chrysler are expected to be more contentious than those with Ford amid a federal probe into union corruption that started with the Italian-American automaker. There's also uncertainty about the company's future amid a potential merger deal confirmed this week with French automaker PSA Group.