UAW and Ford Agree on 25% Wage Increase... Will the Big Three Strike End for Now?

Ford Rises in After-Hours Trading on News of Tentative Agreement

The United Auto Workers (UAW), which has been on strike against the Big Three U.S. automakers since last month, has reached a tentative agreement with Ford for a 25% wage increase after six weeks. Attention is focused on whether this agreement will influence negotiations with other automakers such as General Motors (GM) and Stellantis, potentially bringing an unprecedented simultaneous strike of the Big Three to an end.

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According to major foreign media on the 26th, the UAW entered final wage negotiations with Ford the previous night and became the first among the Big Three U.S. automakers to reach a tentative agreement.

According to the labor-management agreement, Ford's wage increase rate is 11% in the first year alone, totaling 25% over the next four years. Including increases in cost-of-living allowances, the total wage increase rate exceeds 33%. Treatment of temporary workers has also improved. UAW President Shawn Fain said, "For temporary workers earning minimum wage, the wage increase rate will exceed 150% during the contract period," adding, "These workers will receive the highest wages after three years." He also mentioned that rights to strike, including plant closures, have been secured.

Jim Farley, CEO of Ford, stated, "We are pleased to have reached a tentative agreement on a new labor contract with the UAW." The company also urged workers to return to plants that had been shut down due to the strike.

Buoyed by this news, Ford's stock price rose about 2% in after-hours trading on the 25th (local time).

The UAW began simultaneous strikes against the Big Three U.S. automakers on October 15. The cause was disagreements over wage negotiations, and the number of strike participants grew to 46,000. Economic losses also snowballed. According to estimates by the Anderson Economic Group, the economic loss caused by the Big Three strike reached a total of $9.3 billion as of early this week.

After news of the tentative agreement between Ford and the UAW was announced, GM and Stellantis issued statements saying they are working to reach an agreement as soon as possible.

Sam Fiorani, Global Vehicle Vice President at automotive market research firm AutoForecast Solutions, said, "This tentative agreement will serve as the foundation for the two agreements to be made in the future," adding, "Since the differences among the three parties are not large, they are expected to cooperate quite quickly."

Tim Piechowski, Portfolio Manager at asset management company ACR Alpine Capital, predicted, "Currently, the Big Three stock prices reflect a worse scenario than Ford's tentative agreement," and added, "This agreement is expected to have a positive effect on future stock prices."

This content was produced with the assistance of AI translation services.