Auto employees, Stellantis reach a temporary contract agreement that follows the model established by Ford

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DETROIT (AP) — Stellantis, the company behind the Jeep brand, has reached a tentative agreement with the United Auto Workers union that mirrors the template set by Ford earlier this week.

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UAW President Shawn Fenn confirms the agreement In a video appearance on Saturday evening and stated that the company’s 43,000 members still need to vote on it.

The strike by about 14,000 UAW workers at two Stellantis assembly plants in Michigan and Ohio, as well as several parts distribution centers across the country, has been instructed to cease and return to work. Consequently, the agreement will bring an end to a six-week strike by the manufacturer of Jeep and Ram vehicles.

The agreement entails a 25% general wage increase over the next 4 1/2 years for workers at the top assembly plant, with 11% coming after the deal is ratified. Workers will also receive a cost-of-living raise, which will boost wages by 33%, with top assembly plant workers earning more than $42 an hour. At Stellantis, top-level employees currently earn about $31 an hour.

Similar to the Ford contract, the Stellantis deal runs through April 30, 2028.

According to the agreement, the union has saved jobs at a Belvidere, Illinois assembly plant, which was on the verge of closure, as well as an engine plant in Trenton, Michigan, and a machining factory in Toledo, Ohio.

“We have achieved the impossible. We have moved mountains,” said Fenn, “we have reopened a closed assembly plant.”

The deal includes Stellantis committing to build a new mid-size truck at its Belvidere, Illinois factory, which was slated for closure. The union predicts that about 1,200 workers will be rehired, and an additional 1,000 workers will be recruited for a new electric vehicle battery plant.

“We are bringing both combustion vehicle and electric vehicle jobs back to Belvidere,” stated Fain.

Rich Boyer, the vice president who led Stellantis negotiations, announced that the workforce at the machining plant in Toledo, Ohio, will be doubled. He added that the union has secured a $19 billion investment across America.

Fain stated that Stellantis initially proposed cutting 5,000 jobs in the US, but the union’s strike resulted in the company committing to adding 5,000 jobs by the end of the contract.

With the Stellantis agreement in place, General Motors remains the only automaker without a contract with the union. On Saturday night, the union, seemingly under pressure to gain leverage and secure a deal, initiated a walkout at GM’s facilities in Spring Hill, Tennessee, according to two anonymous sources who spoke with The Associated Press. These sources did not wish to be identified as they are not authorized to publicize the strike.

The UAW claimed that the Stellantis agreement surpasses the gains made in the 2019 contract, indicating that by April of 2028, the base wage of a top-level assembly plant worker will have risen more than all the increases made in the past 22 years.

The union stated that starting wages for new hires will increase by 67%, including cost-of-living adjustments of over $30 an hour. Temporary workers will receive a raise of over 165%, while workers at parts centers will enjoy an immediate increase of 76% once the contract is ratified.

Like the Ford agreement, it will take only three years for new workers to reach the top of the assembly pay scale, according to the union.

Fain mentioned that the union has won the right to strike if Stellantis fails to meet product and investment commitments or decides to close plants.

Democratic U.S. Representative Bill Foster, who represents Belvidere in Congress, stated that he has received indications that the site will produce electric vehicles. Stellantis closed the plant indefinitely in the spring.

Bruce Baumhower, president of the local union at a large Stellantis Jeep factory in Toledo, Ohio, which has been on strike since September, expressed his anticipation for workers to ratify the agreement due to the wage increase of over 30% and an immediate larger raise. He said, “Eleven percent is right on the money. As far as I’m concerned, this is a historic agreement.”

Some union members have raised concerns that Fenn pledged a 40% raise, in line with the amount given to company CEOs. However, Baumhower clarified that it was UAW President Shawn Fenn’s initial proposal during negotiations.

He explained, “For anyone who knows anything about negotiations, you always start with a much higher figure than what you think is achievable.”

Germaine Entwine and other Stellantis workers picketing outside the automaker’s Sterling Heights, Michigan, plant expressed their excitement upon hearing about the tentative deal on Saturday.

Entwine, 48, of Pontiac, Michigan, who has worked at the Sterling Heights plant for 24 years and serves as a team leader in materials, said, “Anytime you reach a tentative agreement, it’s a positive development. After all, the agreed-upon number is what the UAW desired.”

DeSean McKinley, 45, of Detroit, expressed optimism about the deal, even without knowing all the details.

“Through the grapevine, I’ve heard it’s great and very beneficial for all of us, UAW workers,” said McKinley, who spent nine years with Stellantis and worked at the Sterling Heights Assembly Plant. He added, “It’s a blessing.”

The union and Stellantis engaged in intense discussions on Thursday before finalizing the deal on Saturday, the day after the Ford deal was announced.

More than 14,000 GM workers are currently on strike at factories in Texas, Michigan, Missouri, and Tennessee.

The union initiated a targeted strike against the three automakers on September 15 after their contracts expired. At its peak, about 46,000 workers were on strike against the three companies, representing approximately one-third of the 146,000 union members in the Detroit Three. Automakers had to lay off several thousand employees due to parts shortages in their manufacturing systems.

Under the Ford deal, employees with pensions will experience smaller increases upon retirement, while those hired after 2007 with 401(k) plans will receive larger increases. Unions will also have the right to go on strike for the first time over the company’s plan to close factories. Temporary workers will also receive significant pay raises, and Ford has agreed to shorten the time it takes for new hires to reach the maximum pay scale to three years.

Additionally, other union leaders who pursued more aggressive bargaining strategies in recent months have secured wage increases and other benefits for their members. Last month, the union representing Hollywood writers called off a nearly five-month strike after achieving victories in areas such as compensation and employment tenure. Similarly, the Teamsters won new wage increases and benefits for unionized UPS workers over the summer after threatening a nationwide strike at the delivery company.

Outside the Sterling Heights plant, the enthusiasm among strikers is at an all-time high. Some stated that they are awaiting the ratification vote on the deal and eagerly anticipating returning to work.

Anthony Collier, 54, of Sterling Heights, Michigan, said, “The temporary agreement is excellent. We’ve heard it will be at least on par with Ford, so we believe many people will be eager to sign on. Most of us had to dip into our savings or take out loans. Everyone knows that the economy has put a strain on all of us, so being on strike has been a little challenging.”


AP Business Writer Halleluia Hedero contributed to this report from Jersey City, New Jersey. AP staff writer Corey Williams contributed from Sterling Heights, Michigan.


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