The United Auto Workers union (UAW) has “finalised” a tentative agreement with Ford Motor regarding additional modifications to the 2007 UAW-Ford labour agreement which UAW Ford Council delegates had voted “overwhelmingly” to recommend ratification to their members, UAW officials said in statements.
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The agreement remains subject to ratification by rank and file UAW members at Ford facilities across the US, according to top UAW officials.
The UAW and Ford had earlier reached agreement on a four-year contract in November 2007 and agreed on modifications in February 2009.
The UAW made numerous concessions to reduce labour costs at Detroit rivals Ford and General Motors under the recent Obama administration-supervised Chapter 11 bankruptcy restructurings of both companies. Ford, which has not asked for government funding, subsequently asked the UAW to make similar concessions for its facilities.
“We appreciate the support of the UAW Ford Council for the work accomplished by our negotiating team during these discussions with Ford,” said UAW president Ron Gettelfinger in a statement.
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By GlobalData“This agreement is another step in meeting the challenges of a very difficult time in the US auto industry, and we look forward to presenting it to UAW Ford workers.”
The modified agreement has also been recommended for ratification by the UAW Ford National Negotiating Committee and by the UAW International Executive Board.
UAW vice president Bob King, who directs the UAW Ford Department, added: “With the current proposals we have protected our retirees and won important additional product and investment commitments for our active members… The final decision will now be up to UAW Ford workers.”
Neither Ford nor the UAW released details of the deal ahead of the union ratification process.
But Reuters reported that the deal included a no-strike provision and other concessions to bring Ford’s labour costs into line with its US-based rivals and suggested ratification of the concessionary agreement, which includes a one-time US$1,000 bonus, may be a hard sell for Ford workers who have already agreed to a series of ‘give backs’ since 2005.
Key provisions of the deal would freeze wages for entry-level workers at $14 per hour and prohibit the union from striking over wage and benefit claims when the current contract expires in 2011, the news agency said.
There would be no cap on the number of such entry level workers Ford could hire until 2015, when entry-level workers would be capped at a fifth of the factory work force. That would force Ford to grant traditional employee wages by seniority to new hires after that date.
The UAW would also submit wage and benefit provisions of the 2007 contract to binding arbitration when the contract expires in 2011. The union would reserve the right to call a strike at Ford over other issues.
Skilled trade job classifications would be simplified and workers would be placed in “mechanical teams” handling a range of assignments in the plants. That plan would be implemented in all Ford’s US factories by June 2011.
Production commitments Ford made to the UAW intended to preserve union jobs included a renewed commitment to bring new products to assembly plants in Ohio, Kansas, Michigan, Kentucky and Illinois.
These would include a new vehicle for the Michigan Assembly Plant, building hybrid battery packs at a plant in in Rawsonville, Michigan and bringing a new vehicle to the Louisville Assembly plant that Ford could also export for sale to other markets.
Ford also agreed to build its Transit Connect commercial van [currently imported from Turkey] at a UAW-represented US factory if it decides to build the vehicle in North America and factory capacity is available.
Ford has agreed to study the cost of producing dies in China in conjunction with the UAW and to consider whether to bring that work to the United States.
In a statement, Joe Hinrichs, Ford’s manufacturing and labour chief, said the agreement “…would help [us] improve [our] current and long-term competitiveness in the United States.
Gettelfinger told reporters the tentative agreement would provide job security to current Ford workers by winning production commitments from the automaker.
“There is a lot of product commitment here that’s secured – both prior commitments secured from 2007 and additional products, some of which we can’t disclose,” Gettelfinger said after union officials had approved the proposed contract terms.
He also said the deal represented “a delicate balance” for the union as it aims to help Ford return to profitability.
“We want Ford to do well and we know that as they continue to improve that it would make the ratification a little more difficult,” Gettelfinger said.
Gettelfinger said the union had not set a time frame for completing the ratification vote. Other officials told Reuters they expected the vote to be concluded in two to three weeks.
“We’re going to take our time and let the members digest the information because there has been a lot of misinformation out there on this contract,” said Jeff Terry, president of a UAW branch representing Ford workers at a Sterling Heights, Michigan, plant.
But UAW local officials, who met for over two hours at a Detroit hotel to discuss the deal on Tuesday, said they believed membership would approve the proposed changes.
Reuters noted that the UAW had reached four-year contracts with all three Detroit automakers in 2007, but agreed to make unprecedented mid-contract concessions to the companies amid the severe recession and deep downturn in auto industry sales.
UAW workers agreed to mid-contract concessions last February that saved Ford about $500m a year and allowed it flexibility in how it funds a union retiree health-care trust.
But Ford has said its deal with the UAW would put it at a disadvantage over the long term. Traditionally, the UAW has applied one pattern to all of its agreements with Detroit automakers.
Gettelfinger told the news agency Ford’s heavier debt level compared to GM was one reason the union leadership had recommended ratification of the new round of concessions.
Ford is also seeking concessions from the Canadian Auto Workers union. The CAW has said it would resume full-scale discussions with Ford on 26 October.
The CAW wants guarantees on future plant investments in Canada by Ford, while the automaker wants to address a labor cost gap. Labour costs are now about $16 per hour higher for Ford in Canada than in the United States, according to Reuters.
Ford to spend $500m on new Focus plant
