The United Auto Workers and General Motors reached a tentative labor deal on Monday, giving striking UAW workers contracts to approve with each of the Big Three Detroit automakers they have been hitting with targeted walkouts for six weeks. The UAW reached similar deals with Ford on Wednesday and Chrysler-owner Stellantis on Saturday.
The 4.5-year contracts, if approved by the 146,000 UAW members at the three automakers, would give workers hefty raises and claw back some concessions the union made when the U.S. auto industry was on the verge of collapse during the Great Recession more than a decade ago. It will also add significantly to the labor costs for GM, Ford and Stellantis. Some analysts said these added costs will make the Big Three less competitive than their nonunionized rivals, where labor costs are already less, and could complicate the automakers' transition from combustion engines to electric vehicles.
The UAW, led by Shawn Fain, its first president directly elected by union members, countered that labor costs only make up 4% to 5% of a vehicles cost and said the new contracts would shave only a fraction off the billions in profits the Big Three have been raking in in recent years. "Everybody had their pencils out, and I'm quite certain the deal wouldn't have been signed if they weren't confident they could remain competitive," industry consultant Steve Patton told The New York Times.
President Biden, who backed the union and took the unprecedented step of walking the UAW picket line, called Fain to congratulate him on Monday. "Today's historic agreement is yet another piece of good economic news showing something I've always believed," Biden said. "Worker power is critical to building an economy from the middle out and the bottom up." He added that the agreements also "ensure the iconic Big Three can still lead the world in quality and innovation."
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