UAW reaches tentative deal with Stellantis, after Ford

The United Auto Workers union reached a tentative agreement on a new labor contract with Stellantis, the parent company of Chrysler, Jeep and Ram, on Saturday, a person familiar with the matter said Saturday.

The agreement comes three days after the union and Ford Motor Company announced a preliminary agreement on a new contract. The two deals have many of the same or similar terms, including a 25 percent general wage increase for UAW members as well as the potential for adjustments to cost-of-living wages if inflation flares up.

The tentative agreement with Stellantis will require approval by the union council, which oversees negotiations with the company, and then ratification by UAW members.

The deal with Stellantis means that only GM has yet to reach an agreement with the UAW

The union’s contracts with the three automakers expired on September 15. Since then, the union has called on more than 45,000 workers at the three companies to leave their jobs at factories and at 38 spare parts depots across the country.

The latest escalation of the strike in Stellantis came on Monday when the UAW asked workers to strike at the Ram plant in Sterling Heights, Michigan, which makes the popular 1500 pickup truck. The strike halted production of Jeep Wrangler and Jeep Gladiator vehicles at a plant in Toledo, Ohio, and 20 Stellantis parts warehouses.

For decades, the union has negotiated similar contracts with the three automakers, a method known as modular bargaining. Like the contract it struck with Ford, Stellantis’ temporary deal would raise the UAW’s top wage from $32 an hour to more than $40 over four and a half years. This would allow employees who work 40 hours a week to earn about $84,000 a year.

Stellantis, GM, and Ford began negotiating with the UAW in July. The companies have sought to limit increases in labor costs because they already have higher labor costs than automakers such as Tesla, Toyota and Honda that operate non-union factories in the United States.

The Big Three US automakers are also trying to control costs while investing tens of billions of dollars to develop new electric vehicles, build battery factories and retool factories.

Stellantis, headquartered in Amsterdam, was created in 2021 through the merger of Fiat Chrysler and Peugeot, the French automaker. The company’s North American business, which is headquartered near Detroit, is its most profitable.

Stellantis recently surprised analysts with much stronger earnings than General Motors, the largest U.S. automaker by sales. Stellantis generated 11 billion euros ($11.6 billion) in the first half of the year while GM generated nearly $5 billion.

Noam Shibber Contributed to reports.