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Ford workers agree to their first raises in 6 years — but concessions come along for the ride

More than 30,000 Ford workers will receive a 3 percent to 4 percent raise over the next two years in a tentative contract with the automaker reached on Wednesday night, UAW officials and union leaders said.

The new deal—which will be decided by union members later this week—is the result of a 24-hour of “intense, comprehensive” bargaining between the UAW and Ford in Detroit, said UAW President Dennis Williams in a statement.

But it included some concessions by Ford, which said it wanted to maintain the flexibility to respond quickly to changes in the marketplace. Specifically, Ford said it was committed to maintaining a separate “procurement body” in Ford Motor Co. that would pursue new technology. Ford also said it would reduce or eliminate open positions across its U.S. workforce.

“It is significant that Ford has recognized that higher tech should not displace U.S. hourly workers,” said UAW International Vice President Joe Ashton, who represented Ford’s labor unit.

Like most of its U.S. unionized employees, Ford pays less than its peers in other big manufacturing companies, leading some UAW negotiators to demand pay bumps. Those demands led Ford in the fall of 2015 to go on a hiring freeze that has led to a decrease in its workforce since then.

But Ford is now engaged in a turnaround effort, telling analysts this week that it plans to expand by 45,000 over the next five years—a leap that executives said they hoped to see the new contract result in.

Ford workers still have one more must-pass vote, as they prepare to hold an election on the contract in the coming days. UAW members voted against a similar tentative agreement with General Motors this week—thanks in part to strong opposition by its union retirees.

For the UAW, however, the Ford deal comes just after the union agreed to an agreement with General Motors and less than three weeks after the UAW-represented workers voted overwhelmingly to reject an offer from Fiat Chrysler Automobiles that called for a 2 percent raise and almost $3,000 in cash bonuses at the end of the first year of the contract.

The revised contract with Ford followed a series of marathon talks at UAW headquarters in Detroit on Wednesday and Thursday, according to Andrew Cooper, a Ford-United Auto Workers veteran who is a consultant for the union.

The UAW also acknowledged on Wednesday that the new agreement would not produce an improved position for GM workers, who voted on Wednesday to reject a new deal they said did not provide them the value they wanted.

“I know from our perspective that this agreement should provide our members with a better situation than the proposal that GM presented,” said Ashton, the Ford International vice president, according to an article in The Detroit News.