From: Susan Morris
Sent: Wednesday, November 14, 2007 4:16 PM
To: ALAA MEMBERS
Subject: UAW Givebacks – Another Loss for Unions
UAW’s Ford Workers Ratify Contract
Wednesday November 14, 3:51 pm ET
By Tom Krisher, AP Auto Writer
DETROIT (AP) — Ford Motor Co. no longer can complain about being hamstrung by high U.S. labor costs that prevent it from making money domestically.UAW Workers at Ford Ratify Contract That Would Cut Labor Costs, Similar to GM, Chrysler Pacts
The automaker’s hourly workers on Wednesday ratified a historic four-year contract that sets lower pay for new hires and puts Ford’s huge retiree health care liability into a trust run by the United Auto Workers.
The UAW represents about 54,000 Ford workers, and 79 percent of those voted in favor of the pact, the union said Wednesday. The UAW typically does not release vote totals.
Workers at General Motors Corp. and Chrysler LLC already had ratified similar deals, with the contract passing at Chrysler by only a small margin.
The deals are historic because they will help to rescue the troubled Detroit Three and make them more competitive with Japanese rivals who build cars in the U.S., said David Cole, chairman of the Center for Automotive Research in Ann Arbor.
“It’s just a recognition we’re at a brave new world. The business model has changed. The benchmark has shifted to the international manufacturers,” Cole said.
The companies said going into the talks they have about a $25-per-hour labor cost gap with Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co.
Cole said his group’s analysis of GM’s contract shows it eventually may have a labor cost advantage over Toyota, its chief rival for the title of world’s largest automaker by sales.
UAW President Ron Gettelfinger said the union negotiated a contract that protects wages, benefits and seniority rights and provides income and secure health care for retirees.
“We stood our ground in the face of some rather big asks by the company and came away with a creative agreement that addresses the concerns of our members and also gives the company the opportunity to move forward,” he said in a statement. “Now it’s up to Ford to successfully bring to market the top-quality vehicles our members are building in UAW Ford factories.”
The UAW said production workers voted 81 percent in favor of the deal, while skilled trades workers were 71 percent in favor.
“The agreement is fair to our employees. It respects our employees. And the agreement is going to allow us, going forward, to make a really significant improvement in our competitiveness,” Ford President and Chief Executive Alan Mulally told reporters at the Los Angeles Auto Show.
In addition to the active workers, the deal covers more than 94,000 Ford retirees and 28,000 surviving spouses. It will run until Sept. 14, 2011.
The Ford deal was reached early Nov. 3 after a nearly two-day bargaining session at the company’s headquarters in Dearborn.
In exchange for the wage cuts and other concessions, Ford promised not to close any U.S. plants beyond some it already has identified. It also promised future products to six U.S. assembly plants and agreed to make hundreds of millions of dollars’ worth of improvements to factories.
The ratification is a critical event that will help Ford’s profitability and competitiveness, Efraim Levy, a senior industry analyst with Standard & Poor’s rating agency, said in a note to investors.
The shifting of about $22 billion in retiree health care obligations to the union-run trust should free the company from “onerous and uncertain obligations,” Levy said.
Now the company has to deliver on new vehicles, he said.
“What is really needed, in our view, is improved demand for Ford’s products on styling, quality and value improvements,” Levy wrote.
Ford stock rose 5 cents to $8.05 in late trading Wednesday.
Jim Stoufer, president of Local 249, which represents 4,300 workers at Ford’s Kansas City Assembly Plant in suburban Claycomo, Mo., said the contract should be a turning point for Ford.
The company lost $12.6 billion last year, but in the first nine months of this year reported a net profit of $88 million. Still, Ford is losing money on its home turf of North America.
“I think the UAW and Ford got together and decided that we’re in this together and we’re going to turn this around,” said Stoufer, whose plant makes the F-150 pickup truck and the Escape and Mercury Mariner small sport utility vehicles.
Workers, he said, had expected wage and benefit cuts, but realized they did pretty well to preserve wages and get job security pledges.
“I think this gives Ford what it needs to turn around, and at the same time, it protects the membership,” Stoufer said. “I don’t think you can ask for anything more.”
AP Auto Writer Dee-Ann Durbin in Los Angeles contributed to this report.
Ford Motor Co.: http://www.ford.com
United Auto Workers: http://www.uaw.org