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(Bloomberg) — The United Auto Workers won a landmark concession from General Motors Co. to bring battery plant workers into the union’s fold, a move that will pressure Ford Motor Co. and Stellantis NV to follow suit and secure labor’s role in the transition to electric vehicles.

The offer from GM, made shortly before UAW President Shawn Fain spared all three automakers from more walkouts, may shape Detroit carmakers’ labor relations for decades to come as EVs become a bigger slice of production and sales. It also looms as a competitiveness issue: The three companies are vying with Tesla Inc. and other nonunion rivals for EV market share. 

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“GM has agreed to lay the foundation for a just transition” to the age of electric vehicles, Fain said in a livestreamed briefing. 

There’s still much left to be negotiated on how GM plans to include battery manufacturing into its master agreement with the UAW, especially for joint venture plants still under construction that haven’t hired any workers. It’s not guaranteed those future workers will earn the same wages and benefits as UAW-represented workers at auto assembly plants.

Other thorny issues also must still be resolved before a deal is reached to end the strike. The union wants higher wages, a return of pensions and better job security guarantees from Stellantis. That company has proposed shuttering 18 facilities, including an idled assembly plant, along with engine and transmission factories.

In the past week, Ford and GM submitted new proposals to the UAW that included better wages and retirement benefits, respectively. Fain said Friday that Ford’s latest offer includes a 23% pay raise, higher than the 20% from GM and Stellantis.

GM’s offer on battery plants goes a long way toward soothing the UAW’s anxiety about its future as the industry invests more in electric motor and inverter production and abandons internal combustion engines and gear boxes. 

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The Detroit-based company already has one battery plant — a joint venture with South Korea’s LG Energy Solution in Lordstown, Ohio — that currently pays its newly unionized workers about $20 an hour, which is one-third less than the top wage at the automakers.

Ultium Plant Precedent 

Like that Ohio facility, known as Ulitum Cells LLC, other planned battery plants are mostly joint ventures and have been kept outside the bounds of the union’s most recent contract. That arrangement forces the union to organize each new plant individually as it did in Lordstown, and then fight for a new agreement. The GM deal could pave the way for quicker organization and pay in line with other UAW members.

Friday’s respite in the escalation of walkouts came as Fain noted progress in the negotiations. It’s the first time in three weeks the strike hasn’t been widened to include new plants. 

The UAW leader said the union planned to expand its work stoppage to a GM plant making high profit margin SUVs in Arlington, Texas, but held off when the company made its offer to include battery workers in the master agreement.

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“We don’t strike for the hell of it,” Fain said, appearing in a t-shirt emblazoned with the words “Eat The Rich” across his chest. “We have designed this strategy to increase pressure on the companies, not to hurt them for its own sake, but to move them.”

Shares of all three automakers rallied Friday. GM gained 2% in New York, while Stellantis climbed 3% and Ford rose 0.8%. GM and Ford had seen steep declines since July amid uncertainty about the negotiations. Stellantis is the outlier, up 37% so far this year.

About 25,000 union workers have walked out of five assembly plants and 38 parts-distribution facilities since the strike began Sept. 15. Those plants remain on strike. But that represents just one-sixth of the UAW’s membership, leaving Fain with many levers left to pull if he wants to inflict more damage on the companies and their supply chains. His strategy has been to keep them guessing about his next move while minimizing the hit to the union’s strike fund.

This is the first time in its 88-year history that the UAW has targeted all three carmakers simultaneously. Each company is negotiating separately with the union on a new contract, but they’re closely watching each other’s moves and the UAW is weighing their offers against each other.

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The union wants to emerge from the strike with at least a 30% pay raise, down from the 40% increase it initially sought. Ford’s proposed 23% raise  — combined with a cost of living allowance to account for inflation — is likely to meet that threshold, according to a person familiar with the matter.

Ford Chief Executive Officer Jim Farley last week accused Fain of holding an agreement hostage over battery plants, which are mostly joint ventures and haven’t been constructed yet. Those ventures aren’t accounted for in the contract that expired last month.

Automakers Cautiously Optimistic

Ford said Friday it’s “open to the possibility of working with the UAW on future battery plants in the US, reminding that these are multibillion-dollar investments and have to operate at sustainably competitive levels.”

GM said it continues to address outstanding issues with the UAW. It didn’t mention battery manufacturing in its statement.

At Stellantis, Mark Stewart, the chief operating officer for North America, told employees Friday that “while we still have some work to do, I remain optimistic that our discussions are providing a pathway to a tentative agreement.” 

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The UAW also is seeking, among other things, the return of traditional pensions, which the companies say they can’t afford. Fain said Friday the talks are making progress, but held out the threat of more walkouts if comprehensive deals can’t be reached. 

If Ford and Stellantis follow GM’s lead, it could assuage the union’s biggest fear that UAW members employed at gasoline-powered vehicle plants will be replaced by nonunion workers in next-generation EV car factories. 

“What this will mean for our membership cannot be understated,” Fain said. “The plan was to draw down engine and transmission plants, and permanently replace them with low-wage battery jobs. We had a different plan. And our plan is winning.”

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