ANALYSIS: Did a Big 3 Settlement Delay Lead to Higher UAW Pay?

The ink is now dry on the groundbreaking collective bargaining agreements that the United Auto Workers negotiated with the Big Three automakers. More than two months after their previous contracts expired (and following waves of high-profile strikes), UAW members ratified contracts securing huge wage concessions from Ford, GM, and Stellantis.

Seeing the length of the wait and the size of the wage increase led me to wonder whether there might be a connection between the two. Does a prolonged contract renewal negotiation necessarily favor one side over the other? And, if so, does the wait benefit management or labor?

A case can be made for either side. Of course, any employer that accepts a union’s starting demand is obviously going to pay more, so it makes sense for management to wait. But then again, a union that shows its resolve can certainly strengthen its bargaining position as a holdout wears on.

So I formulated a hypothesis, using the well-documented history of automaker bargaining as a test case: The longer it took the Big Three to settle, the more they had to pay their UAW-represented workers.

Highest-Paying CBAs Took Longest to Ratify

To test this hypothesis, I analyzed all 10 contract settlements between the UAW and the Big Three from 1990 to 2023, using Bloomberg Law’s database of Negotiated Wage & Benefit Changes. Because contract details sometimes vary between the Big Three, I looked at the averages for all three automakers.

A first glance at the data shows some support for the theory that a longer delay leads to higher pay.

The raises that the UAW secured in 2023, for example, were larger than in any of the nine previous GM contracts. The total increase—25% to the hourly wage over term, plus $5,000 in lump-sum payouts—comes out to an annual average of 7.22% for the four-and-a-half-year contract. (Cost-of-living increases were not factored in.)

That big raise did indeed come after a big delay. GM’s contract was ratified by UAW members 63 days after the previous contract expired, followed one day later by Ford’s and two days later by Stellantis, for an average delay of 64 days. (The negotiators themselves reached tentative agreements much earlier: between 41 days and 45 days following expiration. But I relied on ratification dates for this analysis because the database has consistently recorded them since 1990.)

Only once before in the past 30-plus years had negotiators at the UAW and Big Three taken so long to reach a settlement. That other delay—also an average of 64 days across the three companies—occurred during the previous bargaining session, in 2019. And that session produced the second-highest average increase for workers: 6.7% per year.

True to form, the third-highest average increase in the past 10 settlements (6.16% per year, in 2015) came in a contract that took the third-most days to ratify (53 days, on average).

Three Decades of Anomalies

So: The three contracts that took the longest to sign were also the three highest-paying contracts as well—which is a strong start for my hypothesis. But beyond that, the connection between delay and pay gets shakier.

Probably the biggest red flag is the fact that some contracts are identical in one aspect but different in the other.

Take those top two contracts in 2023 and 2019. As I mentioned earlier, both were ratified after an average period of 64 days. But those identical delays resulted in different payouts: 7.22% per year in 2023 and 6.7% per year in 2019. If the pace of the bargaining process were truly driving the wage amounts, then one would think that similar delays would yield similar results.

Going back further, the 1999 and 1996 contracts wound up with the same average annual increase of 3.74%. But the average delay in 1999 was 26 days, while bargaining in 1996 ended on or close to the previous contract’s expiration date. This happened even earlier, too: Contracts ratified in 1993 and 1990 each averaged 3% per year, but 1993’s negotiations were actually completed ahead of time, while 1990’s took an average of 41 days.

For my hypothesis to work, delay and pay would need to have moved in tandem over the years, with both factors increasing or decreasing—or standing still—at the same pace in the same year. These side-by-side variances show that this has not been the case.

And then there’s the more obvious problem of the numbers simply not fitting the pattern. Some high-paying contracts actually got resolved relatively early—like 1996’s, which tied for the fourth-highest average pay increase (3.74%) but had an average delay of exactly zero days. And, some drawn-out negotiations actually resulted in low-paying contracts—such as 1990’s, which had the fifth-longest delay among the 10 contracts (41 days) but the lowest average payout (3% per year).

Conclusions and Takeaways

All of this leaves us with a pretty inconclusive picture. It’s true that the three highest-paying contracts were the ones that took the longest time to settle. But they were also the three most recently signed contracts, continuing a general trend toward larger wage increases in the Big Three over the past 30 years of bargaining. The fact that they featured both long delays and high wage hikes doesn’t mean that one has anything to do with the other—especially since most of the earlier contracts failed to show the same synergy.

My main takeaway from this research exercise is that, for the Big Three at least, the higher-paying contracts probably owe more to surrounding labor market factors than to how many days it took to get them signed. In short, the results do not support my hypothesis, and an answer to the broader question—whether a longer bargaining delay favors labor, management, or neither—remains elusive.

Bloomberg Law subscribers can track, search, and run reports on negotiated wage and benefit changes in union contracts by using our Labor PLUS resource. Subscribers can find additional labor data and content on our Labor Relations & Collective Bargaining page.

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