UAW announces tentative agreement with Stellantis. Here are key provisions

Sterling Heights — The United Auto Workers and Stellantis NV have reached a tentative agreement, ending a 44-day strike at the maker of Chrysler, Dodge, Jeep and Ram vehicles, the UAW confirmed in a video posted to social media Saturday evening.

The four-and-a-half-year agreement mirrors the economics of the tentative deal the union reached with Ford Motor Co. earlier this week, according to the union, which championed that the agreement would add 5,000 jobs and represents $19 billion in U.S. investments. The deal ultimately will have to be approved by a majority vote of the rank-and-file members at Stellantis.

The UAW National Stellantis Council will vote whether to send the agreement to members on Thursday when an update with more details will be shared.

The deal includes product allocation for most U.S. plants, including a midsize pickup truck at the Belvidere, Illinois, assembly plant that Stellantis idled earlier this year, UAW Vice President Rich Boyer said in the video. The automaker also committed new product to Trenton Engine, protecting jobs there, and to Toledo Machining, which would double the workforce there.

Saturday was the 44th day of the union's strike against Stellantis and General Motors Co., the same number of days as the original sit-down strike against GM in Flint for which this year's targeted "stand-up" strike against the Detroit Three was named.

"Once again, we've achieved what just weeks ago, we were told was impossible," UAW President Shawn Fain said in a recorded video update posted to social media in which he stated the company had been looking to cut close to 5,000 jobs when bargaining began. "The power of the stand-up strike cannot be understated. ... We have begun to turn the tide on the war on the American working class, and we truly are saving the American dream."

Mark Stewart, Stellantis' chief operating officer in North America, said in a statement that out of respect for the ratification process, the company would refrain from commenting on the details of the contract until they are shared with UAW members. The automaker, however, will provide a financial update on Tuesday when it reports its third-quarter shipments and revenues before stock markets open in Europe.

"Today, as we announce that we have reached a tentative agreement with the UAW on a new labor contract, I would like to thank all the negotiating teams who have worked tirelessly for many weeks to get to this point," Stewart said. "We look forward to welcoming our 43,000 employees back to work and resuming operations to serve our customers and execute our Dare Forward 2030 strategic plan to maintain Stellantis’ position at the forefront of innovation."

Stellantis and GM made new offers late this week that match a 25% raise over the course of Ford's agreement reached Wednesday that would expire in April 2028. Negotiations with GM were ongoing Saturday when the union called GM's Spring Hill Assembly Plant in Tennessee out on strike, joining nearly 15,000 other members.

The 25% at Stellantis breaks down to an immediate 11% wage increase upon ratification; 3% hikes in 2024, '25 and '26; and 5% in '27, according to two sources familiar with the deal who spoke to The Detroit News on the condition of anonymity because they weren't authorized to speak on the subject publicly. Stellantis' top pay currently is $31.77 per hour compared to $32.32 at Ford and General Motors Co. The breakdown would bring the pay to $40.46 per hour at Stellantis by the end of the contract. There also would be a $5,000 ratification bonus.

With reinstituted cost-of-living adjustments that were suspended in 2009, the union estimated the top wage will rise 33% to more than $42 per hour. The starting wage will increase by 67% compounded with estimated COLA, to more than $30 an hour.

Supplemental workers would be converted to full-time before the end of nine months, Fain said. The Stellantis agreement would convert more than 3,200 supplemental current workers to full-time, according to two sources. Supplemental starting pay would be $21 per hour.

"The amount of money we won in gains for temporary workers in this contract," Fain said, "is more than the total amount in gains we won for everyone in the 2019 agreement. ... The days of low wage, unstable jobs at the Big Three are coming to an end."

These lowest-paid workers would see a raise of more than 165% over the life of the agreement, according to the union. Bringing Mopar parts distribution workers up to production pay would mean some of those employees see an immediate 76% increase upon ratification.

Stellantis also would extend the automaker's new car lease program, currently available to management, to workers with at least one year of experience, according to the two sources.

"We truly believe that we got every penny possible out of this company," Fain said. "We left nothing on the table."

Stellantis had more than 14,000 UAW members on picket lines at two assembly plants in Sterling Heights and Toledo, Ohio, and parts distribution centers across the country. Close to 10,000 General Motors Co. workers remain on strike. Hundreds more workers at both companies had been laid off because of the downtime.

The union had elevated its strike against both Stellantis and GM this week. On Monday, the UAW directed 6,800 members at Stellantis' Ram 1500 plant in Sterling Heights to go on strike. On Tuesday, hours after GM said the strike had cost it $800 million, the UAW sent out another 5,000 workers at its most profitable plant in Arlington, Texas, which makes full-size SUVs.

"Taking down that Ram 1500 plant helped put more pressure on them, because they can’t afford to lose that much revenue," said Art Wheaton, an automotive industry specialist at Cornell University's Industrial and Labor Relations School who has performed training for the UAW, GM and Ford. "There would be too much of a cost disadvantage, especially with Ford getting production back up. The purpose of the pattern always has been the other two would follow suit.”

The UAW's negotiations with the two automakers intensified after Ford and the union reached a "historic" tentative deal to end a 41-day strike targeting selected plants at the Dearborn automaker, particularly the Blue Oval's profit engine known as Kentucky Truck Plant, home to Ford's Super Duty pickups and full-size Ford Expedition and Lincoln Navigator SUVs.

Like the Ford agreement, the Stellantis deal more than doubled the value of the automaker's original proposal and included gains valued at more than four times what workers received in the 2019 contract, according to the union. It provides more in base wage increases than Stellantis workers have received in the past 22 years.

Following after Ford, it would take full-time Stellantis workers three years to get to the top wage. The agreement also would increase retirement contributions for current retirees, workers with pensions, and those who have 401(k) plans. The Stellantis deal also includes a right to strike over plant closures as well as a right to strike over product and investment commitments, a first for the union.

President Joe Biden and Gov. Gretchen Whitmer both praised the agreement in statements issued Saturday evening.

"This groundbreaking contract rewards the autoworkers who sacrificed so much to revive our auto industry with record raises, more paid leave, greater retirement security, and more rights and respect at work," Biden said. "This contract is a testament to the power of unions and collective bargaining to build strong middle-class jobs while helping our most iconic American companies thrive."

Whitmer said: "This agreement will raise wages for workers and shore up the company’s footprint in Michigan. ... Let’s build on our momentum and ratify these agreements so Michiganders can get back to doing what they do best — making the world’s best cars and trucks."

The UAW Ford National Council on Sunday will vote on whether to send its tentative agreement to the 56,000 members at the Blue Oval. A Facebook Live update for members with more details is expected that evening. The full ratification process could take two to three weeks.

Stellantis workers react

Flin Fike, 57, of Farmington Hills, who works in skilled trades at Sterling Heights Assembly Plant, said he wishes the 25% wage increase would come all at once given the increases in inflation over the past few years.

"It seems like it would be a better gratitude toward us," the 36-year UAW member said. "Because it’s like making us wait. Eleven percent is really only a $3 raise."

Tomas Rangel, 33, a worker at the Sterling Heights plant, said he was excited to hear about the deal, especially the wage increases, and hopes that the membership ratifies it.

"It would mean a lot," said Rangel, who lives in southwest Detroit. "It would mean more chance of not living paycheck to paycheck. More chance to buy a home and things like that."

Plant worker Brandon Davis, 37, of Warren, has worked at the Sterling Heights facility for just over five years, installing dashboards and connecting wires in Ram pickups produced at the plant. Davis said the top thing he's looking for in the deal is significant improvement in wages so he can someday buy a house and treat his kids to restaurant meals and bounce house visits.

"As long as it's better than last contract and it makes a substantial increase to pay, I'm probably voting yes on it," he said. "But we'll see when the details come out."

Rickey Lawrence Jr., 26, lives about a mile from the plant, where he has worked for five years. He's hoping the tentative contract requires the automaker to upgrade temporary part-time workers to permanent full-time status faster. He said his girlfriend was a part-time stamping facility worker and went a long time without being scheduled for shifts.

"I came in, I was part-time for a couple months or something, then they rolled me over," he said. "But she was part-time for over a year. That's not fair to me."

The deals' possible impacts

Ford on Thursday said the agreement is expected to add about $850 to $900 per vehicle to its labor costs.

"Shawn Fain has achieved a stunning victory in 2023,” said economist Pat Anderson, CEO of Lansing-based Anderson Economic Group which specializes in the auto industry, of the Ford agreement. “He completely controlled the public debate and proclaimed victory on his timeline. The UAW has reset the playing field. The industry will not go back to bargaining the way they had for generations before this.”

Anderson sees the Ford deal being largely adopted by GM and Stellantis. “But there are two serious consequences of this unequivocal UAW victory. First, the rhetoric that Fain used declaring automakers the enemy will have long-tern negative consequences. And, two: Costs are reaching the point of no return and investments will be canceled. We already have acknowledgement of that fact from GM, Ford and Stelantis that have begun pushing back manufacturing plans.”

Stellantis in December announced that it was idling at the end of February its Belvidere Assembly Plant, about 70 miles northwest of Chicago, citing the cost of electric vehicles and a microchip shortage. The change in status of the plant affected 1,350 salaried and hourly workers.

Boyer confirmed Belvidere would be getting new product in the form of a midsize pickup truck on two shifts and a battery plant, which he said would bring "thousands" of jobs to the Illinois city, including more than 1,000 alone at the battery plant. A Mopar parts distribution hub would open there, as well, two sources said.

"My plant was idled, and now we're out here doing this," Alfonso Galindo, 44, of Sylvania, Ohio, who transferred to Stellantis' Toledo Assembly Plant in July after Belvidere idled, said on the picket line on Saturday morning. "I'd love to go back."

Boyer said workers who wish to return to Belvidere will have the right to do so, and those who lost their jobs at the plant without transferring elsewhere will be on temporary layoff and eligible for supplemental unemployment and health-care benefits until the Illinois factory gets back up and running.

There are risks with making the agreement at Stellantis before the Ford deal is ratified, experts said. UAW members at Mack Trucks Inc. earlier this month rejected a tentative agreement and hit the picket lines. Such a move could wreak havoc for the automakers.

But the offered raise and benefits in the record agreement with Ford are greater than what was initially offered to the Mack workers. Ratification at Ford could be a two- to three-week process, one of the reasons members there were sent home from the picket lines once the union announced the deal.

"There are risks, but they outweigh the cost of prolonging this strike," said Marick Masters, a a management professor at Wayne State University. "The union knew it wasn’t going to get a much better deal out of this strike. It's fish or cut bait at this point in time and give the membership a chance to vote."

Plus, the weather is getting colder for members on the picket lines, and high interest rates and consumer prices are hitting pocketbooks for those receiving the $500 per week strike stipend, Cornell's Wheaton said.

Since Sept. 15, workers at Stellantis' Toledo Assembly Plant, home of the Jeep Wrangler and Gladiator, had been on strike. Workers on the picket line Saturday morning said they were hesitant to give resounding approval to the deal reached with Ford without all of the specifics, but several said they were ready to get back to work.

"Twenty-five percent and COLA? That sounds pretty good," said Sonny Lizcano, 32, of Toledo, a 12-year UAW member. "But I want to see the full details."

The union didn't mention anything about extending health-care coverage in retirement for workers hired after 2007. Several workers cited that as a concern, noting the toll working in the plants takes on their bodies.

"If I need to make ends meet, I always can get a part-time job," said Amanda Smith, 48 of Toledo, a 10-year UAW member. The health-care coverage "is what I need to be able to retire."

The team in the plant's paint shop on the picket line was celebrating with cupcakes the Sunday birthday of Lashanda Johnson, 52, of Toledo. Johnson said she normally celebrates a birthday weekend by traveling.

"I'm being responsible this year," the UAW member for almost 30 years said. "We have to be out here to be able to afford things like travel with the economy and prices the way they are."

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Detroit News Auto Critic Henry Payne contributed.