Ford’s excellent Q3 results announcement on Monday has been overshadowed somewhat by mixed union reactions in North American to proposed concessions it has said it needs to stay competitive.
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On the one hand, Canadian Auto Workers (CAW) members at Ford factories in Oakville, Windsor, St. Thomas and Bramalea voted in favour of a new agreement, ratifying the deal by 83% during a series of meetings held over the weekend. The deal was reached on 30 October between the two sides.
The union statement was not one of utter joy at the result.
“No one should mistake workers’ approval as satisfaction with the new agreement,” said CAW president Ken Lewenza.
“Members had faith in the union to negotiate the best agreement possible and protect their interests over the long term, but the problems faced by industry cannot be resolved at the bargaining table.
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By GlobalData“We need government and policy makers to wake up to the fact that the country’s industrial base is rapidly eroding and with it, the entire middle class.”
The deal is the second cost-cutting agreement reached between the CAW and Ford in 18 months and includes cuts to benefits, a reduction in holiday, break times and co-pays on health care, all of which were ‘pattern items’ from the agreements with Chrysler and General Motors.
During the negotiations Ford also announced it would be closing the St Thomas assembly plant in 2011, eliminating 1,400 jobs in the already hard-hit community – the plant makes the Ford Crown Victoria, Mercury Grand Marquis and Lincoln Town Car.
The new agreement expires on 17 September, 2012 and covers approximately 7,000 workers.
“Ford continues to make progress on its transformation plan and our efforts to be competitive when it comes to labor costs are key to continuing to build a healthy, sustainable business in Canada for all our employees,” the automaker said in a statement.
However, Ford Canada accounts for a little over 10% of its North American output and its main union, the United Auto Workers, is about to announce a stunning defeat for a similar proposal south of the border, according to Reuters.
A UAW vote in the United States has dragged on for two weeks to steadily building opposition from shop floor workers who have objected to giving Ford the same concessions already granted to rivals General Motors and Chrysler as part of their government-financed bankruptcies.
Although the official tally is still awaited, UAW members voted against the concessionary deal at most of Ford’s US assembly plants, leaving no doubt about the outcome.
UAW president Ron Gettelfinger on Friday said he had no plans to seek a revote on the deal or more talks with Ford before 2011 when the current four year deal expires.
The tentative UAW agreement included a “no-strike” provision on wages and benefits for the next negotiations in 2011 that became a lightning rod for opposition, Reuters noted.
Workers also objected to a blurring of job classifications for skilled workers that would increase Ford’s flexibility and reduce its costs, and to allowing the automaker to increase hiring of entry level workers at US$14 per hour for a period.
The UAW and Ford agreed on other cuts earlier in 2009 that the automaker believes will save it $500m a year.
