Ford, UAW Reach Tentative Accord on Labor Contract
The United Auto Workers and Ford Motor Co. reached a tentative three-year contract agreement Monday that includes a precedent-setting provision guaranteeing employment for 95% of the company’s 104,000 hourly workers.
The agreement came without a strike two days after expiration of the three-year contract. The deal is expected to serve as a labor relations framework for the domestic auto industry for several years.
“We are pleased with it,” Ford Chairman Alex Trotman said. “It’s an agreement, it’s not a one-way street. There has to be a lot of give-and-take on both sides. We think we have a good deal.”
Union and company executives declined to provide details of the accord pending ratification by the UAW membership in a Sept. 29 vote.
UAW President Stephen Yokich said the agreement came together after the union’s “jobs program was in place.”
Trotman acknowledged that the union and company had discussed a contract of longer than three years and one guaranteeing employment at a set percentage of current levels. Sources said the com pany had offered to guarantee jobs at 85% of current levels but gave in to union demands for 95%.
Dearborn-based Ford had sought a contract of from four to six years, but settled for a traditional three-year deal.
The company, however, turned back a union request for a 2% wage increase for each year of the contract. Instead, UAW members will get a 3% raise in the first year and 3% bonuses the next two years--which is cheaper for the company since the base wage rate does not increase.
The company also agreed to try to bring some work that had been outsourced--that is contracted to outside suppliers--back into Ford factories, but at lower starting wage rates.
The contract bargaining began in June and was distinguished by its tenor of cooperation and com promise. Yokich shied away from using the term “strike target,” trying to project a softer image for the UAW as a flexible trade union aware of the challenges of a global marketplace.
The UAW chose Ford--the auto maker with which it has the best relations--on Sept. 3 as the lead bargainer for the triennial contract talks. The deal reached with Ford will provide a pliable model for negotiations with Chrysler Corp. and General Motors Corp.
Although an early settlement had been expected, negotiators did become bogged down in job security and economic issues. But even as the previous contract expired Sept. 14, the UAW told workers to stay on the job indefinitely.
Trotman said Monday that no single major issue held up negotiations, but rather an array of details that were still being resolved.
Negotiations are typically handled by negotiating teams, but in this case Trotman and Yokich became personally involved in the talks. “On all the key issues, I wanted to stay involved,” Trotman said. “There is hardly anything more important than how we treat our work force.”
The UAW staked out job security as its main concern from the beginning. Ford and the other auto makers said flexibility and competitiveness were their chief focus.
The most important provision in the tentative Ford contract is the agreement for guaranteed minimum employment levels. Although the two sides came to an early agreement on the broad concept, negotiators struggled to write contract language that would satisfy both.
“They basically got stuck on the guaranteed employment levels,” said Bryan Quantz, vice president of UAW Local 900 in Wayne, Mich.
He said the union insisted that Ford maintain 95% of current jobs, but other sources said Ford offered to guarantee 85%. Sources also said the bargainers struggled over how the provision would be interpreted. For instance, would the percentage of jobs be maintained for the entire work force, for each union local or for each plant?
This matter has important implications for outsourcing, because the way the proposal is applied could affect Ford’s ability to ship work to an outside, nonunion supplier. The UAW adamantly opposes outsourcing.
A guarantee of a certain number of jobs could provide a political boost to the union, whose membership has dropped by 50% since 1979. The losses have been particularly acute in the auto industry, where the UAW represents only 400,000 workers, a little more than half its total membership.
Most analysts believe Ford is not risking much by guaranteeing employment levels. The company is likely to hire more workers in coming years, particularly if auto sales continue to grow modestly, as expected. In addition, the labor contract is likely to provide exceptions to guaranteed employment in times of economic stress.
Still, in exchange for guaranteed job levels, Ford sought to pay even lower wages to new hires and to take longer to bring them to parity with more senior workers. New hires now start at 70% of scale and reach full pay in three years.
The major question posed by the Ford contract is whether it can be swallowed by GM. GM will accept it. Whereas Chrysler and Ford are expected to hire more workers in the next few years, GM needs to shed as many as 50,000. workers.
“The biggest issue now is how will they apply the jobs guarantee to GM,” said Harley Shaiken, a labor relations professor at UC Berkley.
Next, the union must decide whether to turn its attention to Chrysler or to GM. Most analysts believe the UAW would like to deal with Chrysler next, since it is least likely to resist any major provisions negotiated with Ford. GM is facing more pressing financial problems and is therefore more likely to insist on job-level and outsourcing concessions.
The UAW’s choice could be influenced by labor talks in Canada. The Canadian Auto Workers union has picked Chrysler as its target to strike if no contract is reached by midnight today. Tuesday.It’s unlikely the UAW would take up talks with Chrysler while the auto maker was in the middle of a strike in Canada.
CAW President Buzz Hargrove, who has been warning of a strike, said Chrysler had made a promising proposal Monday to curb outsourcing, a development that lessens the possibility of a walkout.
