Join Date: Mar 2001
U.A.W. and Ford Reach Tentative Agreement
U.A.W. and Ford Reach Tentative Agreement
DETROIT, Nov. 3 — The United Automobile Workers union reached a tentative four-year agreement with the Ford Motor Company early Saturday that follows the pattern set in new contracts at General Motors and Chrysler.
Unlike those contracts, the agreement at Ford was reached without a strike, and the union did not even set a deadline for reaching a new deal. Analysts say Ford, which lost $12.6 billion last year and whose car and truck sales have plummeted, was the least able to withstand a strike.
“I’m elated that we didn’t have to strike. We were ready to go, but it’s a good feeling that we didn’t have to,” said Keith W. Brown, president of U.A.W. Local 245 in Dearborn, Mich., which represents hourly workers at Ford’s research and engineering plants.
Union leaders will now have to sell the contract to Ford workers, who are wary about their future given the likelihood that the company will soon order another round of job and spending cuts as it tries to revamp its operations in North America.
Any reductions will almost certainly wait until after workers vote on the tentative agreement, a process expected to take place over the next few weeks. Both G.M. and Chrysler announced job cuts after their contracts were approved, which Mr. Brown said could make Ford workers more hesitant to support their agreement.
“I think they did business in bad faith,” Mr. Brown said of Chrysler, which said on Thursday that it would eliminate another 11,000 hourly and salaried jobs in the United States and Canada, on top of 13,000 cuts announced in February.
However, the peaceful settlement may cause some union members to be suspicious of the deal, said Gary Chaison, professor of industrial relations at Clark University in Worcester, Mass.
“Workers may doubt that the union has done all they can without a strike, since that seems to be their modus operandi for these negotiations,” he said.
Like the G.M. and Chrysler agreements, the Ford deal calls for setting up a health care trust, to be run by an outside board including union representatives. It would free the company of about $23 billion in long-term liabilities, while Ford would make an unspecified contribution to create the trust.
No other details of the deal were released, but it is expected to be similar to the deals at G.M. and Chrysler, which include a new two-tier wage system for newly hired and less-essential workers, as well as buyout offers meant to encourage some Ford workers to retire or give up their jobs.
“Our bargaining committee came through for our active and retired members,” the union’s president, Ron Gettelfinger, said in a statement. He said that its bargaining team had “encouraged Ford to invest in product and people while addressing the economic needs of our active and retired members.”
Bob King, a union vice president who runs its Ford department, said, “We face enormous challenges, and we also have enormous potential. Our goals for this contract were to win new product and investment, to enhance job security and protect seniority — and we made progress in all these areas.”
Union leaders will review the contract next week, before it is presented to members for a vote.
The agreement was “fair to our employees and retirees, and paves the way for Ford to increase its competitiveness in the United States,” Joe W. Laymon, Ford’s group vice president for human resources and labor, said in a statement.
Bargainers began the final round of talks at 10 a.m. Eastern time on Thursday. The deal was reached at 3:20 a.m. Saturday. Ford shares rose more than 5 percent Friday, to close $8.95, on expectations that a deal was close.
Ford’s previous contract expired Sept. 14, but the company and the union had agreed to an indefinite extension. The union went on strike against G.M. for two days in late September and against Chrysler for about six hours in early October before reaching agreements.
Workers at G.M. approved their new contract by a 2-to-1 margin, but the vote at Chrysler was ratified by only a slim majority, with workers at six large assembly plants rejecting it.
Ford’s sales have fallen 13 percent this year, the most of any Detroit auto company, in part because it is foregoing unprofitable sales to rental car agencies. But consumer demand has also dropped. Ford slipped behind Toyota this year to rank as the third-biggest automaker, with G.M. in the No. 1 spot.
The company is in the middle of a revamping plan, known as the Way Forward, that calls for cutting 44,000 salaried and hourly jobs. Ford has said it plans to close 16 plants, 6 of which have not been identified.
The Detroit Free Press reported on its Web site Saturday that Ford had decided to put off naming those factories. But given its slumping sales, Ford may need to cut costs faster. Ford has mortgaged most of its United States assets to raise cash, and executives say they do not expect the company to be profitable in North America until 2009.
Wall Street analysts are forecasting a loss of nearly $1 billion in the third quarter when Ford reports results on Thursday.