Ford Motor Co. today reached a deal to alter its contract with the United Auto Workers union that helps the automaker keep costs in line with rivals but risks alienating rank-and-file workers.
DETROIT (AP) — Ford Motor Co. on Tuesday reached a deal to alter its contract with the United Auto Workers union that helps the automaker keep costs in line with rivals but risks alienating rank-and-file workers.
The agreement with the UAW’s leadership includes a no-strike provision, a wage freeze for entry-level workers and work rule changes so employees can do more tasks.
But a $1,000 bonus and promises of additional work at some factories may be enough to get the pact through a ratification vote that likely will begin this week.
Details of the agreement were to be presented to local union leaders from across the country at a meeting in downtown Detroit on Tuesday. Leaders will vote on whether to recommend the agreement to Ford’s 41,000 UAW members, but it could be a tough sell. Local union leaders have reported a large amount of opposition to more concessions because Ford is in better financial shape than competitors Chrysler LLC and General Motors Co.
A person briefed on its provisions said the bonus is payable in March to every UAW worker based on improvements in quality and productivity. It also guarantees work for certain plants with new vehicles or parts, said the person, who asked not to be identified because the deal has not been voted on by members.
The tentative deal also says the union must go into arbitration with Ford rather than strike in the next round of contract talks in 2011.
The provisions are similar to those granted by the union to Chrysler and GM as they headed into bankruptcy protection earlier this year, but it was unclear whether the provisions are exact copies.
Gary Walkowicz, a bargaining committeeman at a large Ford pickup truck factory in Dearborn, Mich., said many union members are against the no-strike clause because it gives up the union’s biggest bargaining chip in the next round of contract talks.
“People are asking what do we have a union for?” Walkowicz said. “There’s a lot of angry people right now.”
UAW President Ron Gettelfinger has called the talks with Ford “a delicate balance” between the company’s desire to make changes and UAW workers’ potential reluctance to agree to further concessions.
Ford workers in March were the first of the Detroit Three to approve modifications to a 2007 contract. The changes eliminated cost-of-living increases and performance bonuses in 2009 and 2010 and suspended the jobs bank in which workers were paid indefinitely even though they were laid off.
Then GM and Chrysler ran into serious financial problems and received even deeper benefit cuts and rule changes. Since that time, Ford executives have said they didn’t want higher labor costs than rivals.
Gettelfinger has said that he does not want Ford to be at a disadvantage to its competition. But he recently noted that the company is in a “unique position” due to decisions it made in recent years to borrow about $24 billion by mortgaging things like its factories and blue oval logo, hire a new CEO and design new and improved vehicles. That has kept Ford healthy enough to stay out of bankruptcy court and avoid taking government aid like its two Detroit rivals.
The Dearborn, Mich.-based automaker turned a $2.3 billion profit in the second quarter, buoyed by $10.1 billion in debt reductions that cut interest payments.
“The more successful the company is, the more difficult negotiations are,” Gettelfinger said two weeks ago.