Ford workers appear set to approve labor deal

Ford debt downgraded to junk
William Walker via CNN

Ford’s unionized employees appear ready to sign a new contract, a move that would allow the automaker to avoid the kind of strike that recently hobbled rival GM for 40 days.

United Auto Workers locals that represent members at various Ford plants around the country have started to report results of ratification votes on a four-year tentative agreement reached late last month. So far 63% of members who have voted on the deal have voted in favor of ratification, giving it a more than 4,000 vote margin in favor. Four years ago, a contract that gave workers their first raise in more than a decade was approved with only 51% of the vote.

Workers at only one plant, the Chicago assembly plant, have voted against the deal, with 61% of membership voting no last week. But even that was more popular than the vote at that plant four years ago, when 68% voted no.

Several plants which voted no four years ago, including a large assembly plant in Kansas City which builds the Ford F-150 pickup, have voted in favor of this deal.

But an overall yes vote isn’t a done deal yet. Some of the largest union locals, those representing plants in Dearborn and Sterling Heights Michigan, Kentucky and Ohio, have yet to complete their votes. Several of those locals voted against the deal in 2015.

The final vote won’t be available until Friday evening. Even if the vote changes and members reject ratification, it doesn’t necessarily mean that members will go on strike. Negotiators for the company and the union would probably try to reach a new deal in that case. Four years ago, membership at Fiat Chrysler rejected the first tentative deal presented to them for ratification, but workers did not go on strike.

This deal at Ford gives members a $9,000 signing bonus, less than the $11,000 signing bonus reached at General Motors. But that signing bonus came after a strike that lasted nearly six weeks, costing members significant lost wages.

The deal with Ford matches GM’s 6% increase in wages for veteran workers, spread out over the four years of the deal. The union estimates it increases compensation to the average production line member by nearly $30,000 over that period.

The tentative deal with Ford was reached in a matter of days after workers at GM returned to work from the picket lines. Neither side apparently wanted to repeat the situation at GM, where the strike cost the company an estimated $2.9 billion. Ford has a history of strong labor relations: Ford’s union members have not struck since 1976.

The deals at Ford and GM both grant temporary workers the ability to be hired full time, at higher pay and with better benefits than they now get. It also speeds up the time it will take for workers hired permanently since 2007 will reach the same pay scale as veteran workers hired before that time.

The union and Ford have agreed to make a change to the original tentative agreement, raising the pay of about 10,000 of those workers hired since 2007. The change, which was confirmed by two sources familiar with the contract language, will cost Ford an additional $15 million over the life of the contract.

The higher pay is designed to fix an unintentional problem: The original draft would have given employees with a work anniversary date before November 15 a lower raise than those who had an work anniversary later in the year.

Once a deal with Ford is ratified with members, the union will turn its attention to a Fiat Chrysler. Negotiations there could be complicated by the fact that the automaker recently announced plans to merge with French automaker PSA Group, the maker of Peugeot.