The United Automobile Workers union reached a tentative agreement Saturday on a new labor contract with Stellantis, the parent company of Chrysler, Jeep and Ram, a person familiar with the matter said Saturday.
The agreement comes three days after the union and Ford Motor announced a tentative agreement on a new contract. The two agreements contain many of the same or similar terms, including a 25 percent across-the-board wage increase for UAW members and the possibility of wages adjusting to cost of living if inflation increases.
The tentative agreement with Stellantis must be approved by a union council overseeing negotiations with the company and then ratified by UAW members.
The Stellantis deal means only General Motors has not yet reached 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 auto workers from the three companies to leave their jobs at factories and 38 parts depots across the country.
The latest escalation of the Stellantis strike came Monday when the UAW called on workers to strike at a Ram plant in Sterling Heights, Michigan, that makes the popular 1500 pickup truck. The strike has halted production of Jeep Wranglers and Jeep Gladiators at a plant in Toledo, Ohio, and at 20 Stellantis parts warehouses.
For decades, the union has negotiated similar contracts with all three automakers, a method known as model bargaining. Like the Ford contract, the preliminary Stellantis deal would raise the UAW’s top wage from $32 an hour to more than $40 within four and a half years. This means employees working 40 hours per week could earn about $84,000 per year.
Stellantis, GM and Ford began negotiating with the UAW in July. The companies have sought to limit the rise in labor costs because they already have higher labor costs than automakers like Tesla, Toyota and Honda, which operate non-union plants in the United States.
The big three U.S. automakers are also trying to keep costs under control by investing tens of billions of dollars in developing new electric vehicles, building battery plants and retooling factories.
Stellantis, based in Amsterdam, was created in 2021 through the merger of Fiat Chrysler and the French car manufacturer Peugeot. The company’s North American business, based near Detroit, is its most profitable.
Stellantis recently surprised analysts with significantly higher profits than GM, the top-selling US automaker. Stellantis earned 11 billion euros ($11.6 billion) in the first half, while GM earned nearly $5 billion.
Noam Scheiber contributed reporting.