The United Auto Workers (UAW) union and Stellantis have announced a preliminary agreement on a new contract

Business / Monday, 30 October 2023 14:53

The agreement, which still needs to be ratified by members, follows a six-week strike by over 14,000 workers at Stellantis assembly plants in Michigan and Ohio, as well as parts warehouses nationwide.

"We have once again achieved what just a few weeks ago we were told was impossible," said UAW President Sean Fein in a written statement. "Specifically, at Stellantis, we have not only secured a record contract but also begun to turn the tide in the war with the American working class."

The preliminary agreement is based on a 4.5-year term, similar to the deal reached with Ford earlier this week, as previously reported by CNBC.

Workers will return to work while the agreement goes through the ratification process, according to the UAW statement on Saturday.

"We look forward to the opportunity to welcome our 43,000 employees back to work and resume operations to serve our customers and execute our Dare Forward 2030 strategic plan to keep Stellantis at the forefront of innovation," said Mark Stewart, Chief Operating Officer of Stellantis North America, in a written statement on Saturday.

In a statement on Saturday evening, GM expressed disappointment in UAW's actions in light of the progress they have made in negotiations.

"We continue to negotiate with UAW in good faith, with our goal remaining to reach an agreement as quickly as possible," GM stated.

About 40,000 UAW members have been on strike since their last contract with GM, Ford, and Stellantis expired on September 15. They have also shut down dozens of plants, including GM's full-size truck plant in Arlington, Texas, earlier this week.

UAW President Sean Fein said in a video message on Wednesday that this move is part of the strategy to conclude negotiations.

According to the UAW, the deal includes a 25% increase in base wages by April 2028, with starting wages exceeding $30 per hour.

The UAW said both the Ford and Stellantis deals include the right to strike if plants close.

"The agreement restores key benefits lost during the Great Recession, including cost-of-living adjustments and a three-year wage increase while also eliminating divisive wage tiers within the union," the UAW statement said.

The agreement must be ratified by UAW members before it becomes binding, and this process will take some time. On Sunday, Fein announced that the national committee would meet to review the deal with Ford. Afterward, local groups will consider it, and then members will vote on the proposed contract.

However, this offer means that Ford workers have left picket lines and will soon return to work.

Negotiations between the union and Stellantis have proven more contentious than talks with GM and Ford. Fein has repeatedly criticized Stellantis for what he called excessive profits and the CEO's salary. On Friday, he claimed on live television that the company was "lowballing" the union before tossing a stack of pages, which he said was Stellantis' proposal, into an office trash bin.

On Monday, Fein called on workers at Stellantis' Ram 1500 truck plant to go on strike. The company responded that it was "disappointed" by the move.

In his Saturday statement, President Joe Biden, who made history as the first sitting president to join a picket line, called the contract "innovative."

"This contract is evidence of the ability of unions and collective bargaining to create strong middle-class jobs while helping our most iconic American companies thrive," Biden said. "The final word on this tentative agreement will ultimately be with the members of the UAW at Stellantis in the coming days and weeks."