Investing.com -- Shares in Ford Motor Company (NYSE:F) edged slightly higher in premarket U.S. trading on Monday, after the carmaking giant reached a tentative labor deal with the United Auto Workers union that would end long-standing strikes at some of the company's plants.
On Sunday, the UAW outlined the major parts of the 4-1/2-year agreement, which includes $8.1 billion in investments in factory renovations and pay raises of at least 30% for many workers during the life of the contract. At the top-end range, some permanent employees would see an additional $70,000 in wages, while salaries for the lowest-paid temporary workers would jump by 150%.
A move by Ford to slash costs by offering lower pay to workers at component parts factories than those at vehicle assembly plants would also be erased.
In exchange for these concessions, Ford would retain the right to buyout the contracts of an unlimited number of older workers on top-rate wages for $50,000. The Michigan-based auto manufacturer could then replace them with younger employees who earn less than the top-end pay for three years.
UAW President described the deal, which still needs to be approved by the union's members, as a demonstration of the "incredible power" workers can have in labor negotiations. The protracted talks have been marked by the UAW exerting pressure on Ford -- as well as its peers General Motors (NYSE:GM) and Stellantis (NYSE:STLA) -- through strikes at an expanding number of the firms' plants.
Chrysler-owner Stellantis and the UAW also reached a tentative agreement over the weekend. However, bargaining is ongoing between the union and GM, with Reuters reporting that discussions have hit a snag over retiree pension costs.