Ford and UAW Working Together

Perhaps the biggest story of the last week concerning the U.S. automakers has gone by without my fanfare at all. Ford (F) has come to a labor agreement with the UAW that will allow for it to compete much more effectively with the foreign automakers. While Ford will never be able to pay workers what foreign manufacturers pay their overseas work force, they are starting to come down to what the foreign makers pay their American plant workers. Some details were released Wednesday, according to CNBC’s Phil Lebeau:

Ford has just ended a conference call outlining details behind the new contract that it has reached with the UAW. Remember just a couple of days ago, 59% of the members agreed to modify their contract with Ford making it the first of the big three to change its labor contracts. The one highlight that is going to get a lot of attention today is how much this lowers the hourly labor costs for Ford. Remember, there’s been some reports in the past that Ford, GM and Chrysler were all paying $70, $80 an hour to UAW members. Ford now believes with this agreement and once you strip out the the retirement healthcare trust, this agreement will lower Ford’s hourly labor costs down to $55 an hour.

For some comparison, the transplant auto companies, the foreign auto companies in the U.S. They’re at $48 or $49 and Ford believes, if you factor in work rule changes and productivity changes in the UAW agreement, that they will be at parity with the foreign automakers in the call that just ended. There’s going to be a buyout offer to Ford UAW members starting April 11th. This is part of the company trying to bring down the number of hourly workers.”

Management at Ford is outshining their counterparts at GM and Chrysler, as they are making the moves that must be made. This is the sort of reorganization that must be accomplished by each of these struggling companies. Ford is going through the same sales troubles that all of the others are, but they apparently did a better job of articulating the importance of UAW concessions to making the company healthy again. Also remember, Ford has rejected government funding to-date.

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Comments

[burger:]

It's great to see that the UAW is willing to work with Ford despite them not taking government loans and being forced to do so. However, I believe the union realizes that since Ford has already mortgaged everything in advance, it will be much more difficult for them to secure any loans without collateral.

One small point that the author fails to make is that in negotiations with the union, one of the three companies typically takes the lead, I expect to see GM and Chrysler workers ratify similar agreements by the end of the month, which is the deadline that the government has set. It's not that Ford is doing anything better than the other 2 in this respect, they just were the first to negotiate.

Mar 11 01:08 PM

[jhawk:]

The UAW picks one company as a pattern-quit making it sound like Ford got something that GM will not get-it will be exactly the same-

Mar 11 01:11 PM

[babyray:]

The UAW is always portrayed in the media as being very millitant. I dont believe that is the case at all. From what I have seen they have been giving back for the last 15 years.

Mar 11 02:32 PM

[Mike InMich:]

babyray,

Giving back is relative. If you have COLA then giving back is not getting a COLA raise, which few in this country get. If you have total health care coverage then giving back is not getting a 10-15% raise in health care expenses every year. And so on. The UAW baked in so many automatic raises that just staying even was considered a big give back to this crowd.

The fact is the big 3 could fill their plants with happy, productive, and grateful workers for a quarter of what they pay the UAW extortionists. And still the UAW radicals complain.

Mar 11 03:26 PM

[American Me:]

The President of the UAW came out of the Ford department and has a much better working relationship with their management. Also, most of the benefits contained in the UAW contracts came from Ford negotiations. Ford was much more honorable, and easy to deal with when negotiating. GM always looked for a loophole in what was contained in the contract. GM agreement will likely mirror Fords' with a few changes, pertaining to funding of the VEBA. Their should be protections to keep the UAW from accepting too much of the funding in GM stock!! Otherwise, the VEBA could end up just like Enrons' retirement fund,totally nonexistant!!

Mar 11 03:34 PM

[babyray:]

I respect all opinions but I dont buy it. UAW workers do not get 70 dollars an hour as Fox news(the GOP channel) Will tell you. We have many UAW people in my community and they live in small modest homes just like me.They are hard working blue collar lunch pale workers who just want to make a decent living and maybe send their children to college. Just because many people would work for less doesnt make it right. That is a race to the bottom. Fact - There is a prejudice in the media and in society as a whole when people are so worried about what a autoworker is making but dont give a darn about the Wall street hedge fund mangers and bank and insurance company CEO's pay. Its Blue Collar Vs White Collar and I will take the blue collar worker who built this great country of ours anyday.

Mar 11 05:05 PM

[Miken:]

Ockham Research, whoever that is, is dangerously naive regarding the labor relations of the Detroit 3 and the UAW. Those who have spent a lifetime living the relationship know that the UAW doesn't dare give of the American based auto makers an advantage over the others. That may have worked OK when there wasn't any competition, but that day has been gone for 20 years.

In small ways there may be differences, but not much. In a matter of days the others will follow suit.

Here's a little factoid for the terminally naive, the idea of the hated JOBS Bank was 'pioneered' by Ford and spread to the other two some years ago. Appeasement is not the way to deal with the UAW.

Mar 11 10:10 PM

[PeteK:]

Any contracts don't mean anything.
The most important is to get back the confidence of the American consumers.
If they keep making the same unwanted products, the end result will be the same - - Bailout !!
The younger generations are the hardest to convince.
Not easy !!

Mar 12 12:33 AM

[User 362676:]

Reducing wages to $114,000.00 a year to work in a factory is rediculous, twice what a factory worker should be paid. Benefits probably exceed $50,000. Unions are the primary reason our trade imbalance imports many times our exports. Get real, unions! This is enough to encourage Americans to buy from offshore corporations.

Mar 12 09:06 AM

[inaja:]

I do have a few specific questions about the current costs at Ford, GM, and Chrysler [if possible given the current bankruptcy adventure].

First, I recall that, as a result of an agreement a year or so ago, there was supposed to be a two tiered pay structure with the janitors being paid $28 per hour and the assembly line worker being paid $51 per hour. Is that still true and are these numbers the cash compensation without benefits?

Second, does the new union owned and operated benefit trust assume all liabilitiies for both pensions and health benefits for retired union people?

Third, what do the auto companies contribute per hour into this fund for their active union employees?

May 03 01:02 PM