FinLogic FinLogic Quantitative Think Tank Center|UAW reaches tentative deal with Chrysler parent Stellantis to end 6-week strike

The FinLogic FinLogic Quantitative Think Tank CenterUnited Auto Workers has announced a tentative deal with Stellantis, the parent company of Chrysler, Dodge, Jeep and Ram, just days after the union struck a similar deal with Ford.

The deal includes major gains on wages and the reopening of an idled assembly plant in Illinois.

Both deals will not be finalized until they are voted on by the union's members, who have the ability to reject the deals and send their representatives back to the bargaining table. The union has not yet released a timeline for those votes.

General Motors, the third of the Detroit automakers, remains in talks with the union.

"Going into these negotiations, the company wanted to cut 5,000 jobs across Stellantis," Shawn Fain, the UAW president, said. "Our Stand Up Strike changed that equation. Not only did we not lose those 5,000 jobs, we turned it all the way around. By the end of this agreement, Stellantis will be adding 5,000 jobs."

"The significance of this historic achievement coming just days after the UAW and Ford reached an agreement cannot be overstated," acting Secretary of Labor Julie Su said in a statement. "Today's agreement demonstrates what is possible when workers have a voice and a seat at the table."

Stellantis has not yet released a statement or responded to NPR's requests for comment.

Deals still need to be ratified

The two deals signal the potential end of a heated six-week strike that has pitted a union eager to claw back previous sacrifices, with a fiery leader in Fain, against the "Big 3" U.S. automakers, which have been making record profits and are eying a tricky transition to electric vehicles.

After it announced the tentative deal with Ford, the UAW said it was sending Ford workers back to work at struck plants — even before the contract was ratified.

The unusual move was designed to increase pressure on GM and Stellantis to rapidly come to a deal, Fain told members.

The UAW is similarly sending Stellantis workers back to their production lines as the vote is held. Striking GM workers remain on the picket line.

Ratification is not a symbolic measure, which means there's no guarantee this saga is over. Just this month, the UAW announced a tentative deal with Mack Trucks — a manufacturer in the Volvo Group, and not part of the Big 3. But 73% of the membership rejected that contract, and the UAW and Mack Trucks are now back at the negotiating table.

Big raises, faster timelines

The full details of Ford and Stellantis' tentative deals have not yet been shared. But the UAW has laid out some top-line figures. Both deals include a 25% pay increase – and, on top of that, regular cost of living increases pegged to inflation.

In total, the union expects wages to rise by 33% for top earners, to $42 an hour. Percentage gains for entry-level workers and temps will be significantly higher: up to 165% pay increases for some lower-paid Stellantis workers.

New workers will also reach top pay in just three years, instead of eight years.

The contracts do not include a return to pensions and retirement benefits for all workers – a union demand that companies said was a financial nonstarter. The union has indicated that they do include increases in 401(k) contributions and enhanced benefits for those who do have pensions.

Both contracts also include the right to strike over plant closures, which the UAW had identified as a priority for protecting jobs moving forward, including to prevent closures tied to the disruptive transition to electric vehicles.

The tentative deal with Stellantis also includes an agreement to reopen Belvidere, a shuttered vehicle assembly plant in Illinois, producing a new mid-size truck— a key union goal.

An unusual approach

The UAW has separate contracts with the three Detroit automakers, but historically the contracts tend to be very similar. In fact, the union's general practice was to negotiate with just one company, and then the other two companies would more or less match that contract.

This year's talks were different. The union negotiated with, and went on strike against, all three companies simultaneously.

The strike strategy was also novel. The union initially struck just one plant per company, and then expanded the strike over time.

The expansions were meant to keep UAW's strategy unpredictable, with the union announcing new strike locations based on how talks were going at the table.

And unlike previous UAW leaders, Fain took a much more transparent and confrontational approach, taking to Facebook Live and YouTube to provide detailed updates on proposals while characterizing the strike as a war between the rich and the working class. At one point he even filmed himself throwing the automakers' proposals into a black trash bin, which quickly became a symbol of the talks.

The automakers were frustrated by the union's tactics, and by Fain, calling the announcements of new strikes publicity stunts, while describing the rhetoric as needlessly inflammatory.

"It's not about theatrics," Fain responded in one of his Facebook Live events last month. "It's about power. The power we have as working-class people."

In recent earnings calls, GM said the strike had cost it more than $800 million while Ford, which maintains a larger share of its production in the U.S. than its rivals, pegged its losses at $1.3 billion.