By Chrysler-parent Stellantis and Ford Motor have successfully resolved their negotiations with the United Auto Workers, bringing an end to a six-week strike. General Motors, however, is still in the process of reaching an agreement.
Stellantis Deal
Details of the Stellantis deal have not been disclosed at this time.
Ford’s Contract
Ford’s contract, announced on Wednesday night, includes the following provisions:
- A 25% wage increase over four-plus years.
- Cost-of-living adjustment.
- The right to strike in the event of plant closures.
The United Auto Workers will provide additional details on Sunday and members will have the opportunity to vote on the contract at a later date. In the event that workers vote against the deal, further negotiations will take place.
Template for Other Contracts
Both Stellantis and General Motors will likely base their contracts on the template set by Ford. Each company has its own separate contract with the United Auto Workers, meaning that negotiations and voting processes will occur independently with each automaker.
Auto Workers at Ford Told to Return to Work Amid Tentative Agreement
Auto workers at Ford have been instructed to return to work while a tentative agreement is in place. The decision comes as General Motors (GM) and Stellantis, the two other major automobile manufacturers, want to prevent Ford from regaining full capacity while they continue negotiations. This news was shared by UAW Vice President Chuck Browning on Wednesday.
The strike, which began on September 15, has now surpassed the length of the 2019 walkout and has affected all three Detroit automakers. As a result, investor sentiment has been impacted, with Ford and GM shares seeing declines of approximately 34% and 29%, respectively, since contract issues came to light in July. In comparison, the S&P 500 has experienced a decrease of approximately 7% during the same time period.
On the other hand, Stellantis, being a more global company, has actually seen a 3% increase in its share price over the same period. However, it is important to note that the decline in share prices cannot be solely attributed to the strike. Ford’s stock, for example, plummeted by 12% after reporting disappointing third-quarter earnings on Friday.
Despite these challenges, there is hope that a resolution will soon be reached as negotiations continue.
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