Under the agreements the United Auto Workers Union members ratified with Detroit’s Big Three automakers last week, workers will gain significant retirement benefits, wage increases, the reinstatement of cost-of-living adjustments and the elimination of wage tiers.
Across the three companies, 64% of voting members voted in favor of the agreements, according to the union. According to the UAW’s ratification trackers, 70% of employees at Stellantis and 69.3% at Ford voted for the new contracts. However, GM’s vote was much closer, with just 54.7% of voting members approving. The trackers showed that 102,679 workers voted out of about 146,000 UAW members employed by the Big Three.
The new contract will give union workers an immediate pay increase of 11%, and union members will get a total pay increase of 25% over the course of the 4 1/2-year deal. The raises and benefits cumulatively boost the top wage to more than $40 per hour, including an increase of 68% for starting wages to more than $28 an hour.
While the automakers did not agree to restore the workers’ defined benefit pension plan, which was shut down in 2007, current employees will see a 10% boost in their employer’s contribution to their 401(k)s, which will more than double many members’ annual 401(k) contributions over the life of the contract.
Current retirees will also receive annual bonuses for the first time in 15 years—a cumulative $1.25 billion boost in total benefits.
Marick Masters, a professor of management at Wayne State University’s school of business in Detroit, says via email that anecdotal evidence suggests that more senior workers at GM voiced opposition because they did not benefit as much relative to other workers, including temporary workers. However, he says the UAW membership has divisions across major caucuses and ideological perspectives.
“Contested elections over ratification speak to the democratic orientation of the union,” Masters says. “Rather than a sign of weakness, it represents new-found strength in the reformed UAW.”
Overall, Masters says the ratification votes revealed that a “sizable majority of the UAW members approve the basic terms of the pattern agreements.”
“This support for the union’s bargaining achievements positions the union to carry its message to nonunion workers in the auto industry that they can gain appreciably from joining the UAW,” Masters says. “The thesis behind that view is that if the UAW can win substantial gains in an industry that has become increasingly nonunion through the growth of so-called foreign transplants and the emergence of nonunion domestic electric vehicle producers, then imagine the strength it would have if the nonunion workers joined ranks.”
Masters adds that several nonunion companies, such as Toyota, Hyundai, Nissan and Subaru, have already announced significant wage increases and other steps to increase pay, including shortening the time-in-progression to the highest wage rate.
“These actions mirror the agreements ratified by the UAW workers with the Big Three,” Masters says. “Each of the nonunion companies keep an eye on the labor markets and understand what they have to pay workers to remain competitive and nonunion. I would expect these companies to be very proactive in addressing compensation, health and safety, and other human resource management issues, such as benefits and scheduling, to keep the union at bay.”
The new contracts run through April 30, 2028. UAW President Shawn Fain has said he plans to expand the union’s battle from the Detroit automakers to Tesla, Toyota and other nonunionized automakers in the U.S.
You Might Also Like:
« Nomination Period Open for 2024 Plan Sponsor of the Year Awards