Ford was the first of Detroit's Big Three car manufacturers to negotiate a settlement to strikes joined by 45,000 workers since mid-September. The UAW will now turn its attention to talks with General Motors (GM.N) and Chrysler parent Stellantis (STLAM.MI).
The agreement, which still must be ratified by union members, includes a 25% wage hike over the life of the 4-1/2-year contract and the elimination of lower-pay tiers for workers in certain parts operations at Ford.
The Ford contract stands as a significant victory for labor, one of many reached this year as workers have walked out or threatened strikes in various industries such as rail, entertainment, shipping and casinos.
"We still have to see some of the details but it is a major achievement for the union," said Harley Shaiken, labor professor at University of California Berkeley.
The agreement reverses concessions the union agreed to in a series of contracts since 2007, when GM and the former Chrysler were skidding toward bankruptcy, and Ford was mortgaging assets to stay afloat.
The companies are collectively in a better position now, though they have all stated that excessive pay increases would hamstring their ability to compete in coming years against lower-cost manufacturers, including Tesla (TSLA.O), the leading seller of electric vehicles.
The deal, which could help create a template for settlements with GM and Stellantis, amounts to total pay hikes of more than 33% when compounding and cost-of-living mechanisms are factored in, the UAW said.
"We know it breaks records," UAW President Shawn Fain said in a video address Wednesday night. "We know it will change lives. But what happens next is up to you all."
The UAW told Ford workers now on strike to return to their jobs during the ratification process. That means production of Ford Super Duty pickups, Ford Bronco and Explorer SUVs and Ranger trucks could restart this week.
"We are pleased to have reached a tentative agreement on a new labor contract with the UAW covering our U.S. operations," Ford CEO and President Jim Farley said in a statement.
Ford shares were up 2.7% in premarket trading on Thursday.
GM and Stellantis in statements on Wednesday said they were working to secure agreements as soon as possible.
