April 22, 2025

Ford Workers Ratify Contract

The United Automobile Workers union said Wednesday that the contract had passed, with 63 percent voting “yes” and 37 percent voting “no.” Early on, the deal appeared in danger of being rejected, after several large plants turned it down. But workers who had weighed in since Friday were overwhelmingly in support.

The contract calls for 5,750 new jobs that Ford had not previously announced, and for most workers to receive signing bonuses of $6,000 and profit-sharing checks averaging $3,700 this fall. They also will get bonuses totaling up to $7,000 in later years, but workers earning entry-level wages are the only ones to receive a pay increase.

“This agreement is proof that, by working together with our U.A.W. partners and local communities, we can significantly create new jobs, invest in our plants and people, and make a very positive impact on the U.S. economy,” Mark Fields, Ford’s president of the Americas, said in a statement. “Our agreement is fair to our employees and it improves our competitiveness in the U.S.”

Ford has scheduled a conference call with analysts and reporters Thursday to explain the financial implications of the deal. The credit-rating firms Standard Poor’s and Moody’s said recently that they might upgrade Ford if the contract were ratified.

Workers at the last Detroit carmaker to reach a new labor deal, Chrysler, began voting this week. Voting there is scheduled to end Oct. 26.

Labor experts said they expected workers at Chrysler to express less opposition than those at Ford did, given Chrysler’s shakier financial position.

Gary Chaison, a professor of labor relations at Clark University in Worcester, Mass., attributed the big swing toward approval at Ford to union leaders realizing that the deal was in peril and stepping up their efforts to show workers how they would benefit. Sentiment also shifted after the leaders began to prepare for a strike, warning that Ford might not return to the bargaining table.

“They got out there and really started to sell the agreement, not as a great agreement but an adequate agreement,” Mr. Chaison said. “The members walked right to the very edge of a cliff and they looked over and decided to take a step back.”

The contract adds only about 70 cents an hour to Ford’s labor costs, which were roughly $59 an hour under the old contract, estimated Brian Johnson, an analyst with Barclays Capital. That is a 1 percent increase, the same amount that General Motors said its new contract, ratified by workers last month, would add.

“The contract, while richer than other firms, does not impose significant new costs on Ford (while a strike would have temporarily cut production and profits),” Mr. Johnson wrote in a report to clients this week. He said a strike could have cost Ford $273 million a day in lost revenue and $71 million a day in profits.

Workers at plants in Chicago and Wayne, Mich., voted against the deal in the first few days, but their “no” votes were more than overcome by strong support from large union locals in Dearborn, Mich., Louisville, Ky. and Kansas City, Mo.

“Our leadership went in the plant and made sure we answered as many questions as we could so they were making an informed decision,” said Jeff Wright, the president of U.A.W. Local 249 in Kansas City. More than 90 percent of voters there supported the deal Sunday after Jimmy Settles, the U.A.W. vice president in charge of negotiations with Ford, flew in to meet with its workers.

Mr. Wright said his members would have liked a better deal, but understood that this was not the time for the union to press harder.

“I don’t know anybody that wouldn’t want a raise,” he said. “It’s going to be good to have this behind us so we can go back to building cars and trucks.”

In the contract, Ford committed itself to invest more than $1 billion in the Kansas City plant, which has 3,700 workers, to make upgrades and build a metal-stamping plant on site. The plant will begin building a new full-size commercial van, called the Transit, in 2013.

It also will get an additional shift of workers to build the F-series pickup truck in 2012, adding perhaps 1,500 workers, Mr. Wright guessed, and the next-generation of the F-series will be built there.

“As the nation’s economy remains stalled and uncertain and its employment rate stagnates, we were able to win an agreement with Ford that will bring auto manufacturing jobs back to the United States from China, Mexico and Japan,” the U.A.W.’s president, Bob King, said in a statement.

Ford and the union have yet to resolve a grievance filed by thousands of workers who assert Ford violated its “equality of sacrifice” promise by restoring bonuses for salaried employees but not for its hourly work force. The grievance is in arbitration, with a hearing scheduled for November, and any payout resulting from that would be on top of the contractual bonuses.

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Chrysler Is Last to Reach Deal With Union

The union said Chrysler, which went through bankruptcy protection in 2009, also committed to investing $4.5 billion to retool plants for new models. It planned to lay out more details of the proposed contract, which covers 26,000 workers, at a news conference later Wednesday.

“This agreement is the latest in a remarkable turnaround for Chrysler,” General Holiefield, the U.A.W. vice president in charge of negotiations with Chrysler, said in a statement. “Chrysler has turned the corner and with this agreement will continue to move forward. It’s a new day at Chrysler.”

Chrysler, the smallest of the three Detroit automakers, was the last to reach a deal with the U.A.W. Negotiations there were the most difficult, as Chrysler executives took a hard line against any increase in labor costs.

The union last month ratified a new contract with General Motors that creates or retains 6,400 jobs. Workers at the Ford Motor Company began voting this week on a tentative agreement, reached Oct. 4, that adds 12,000 jobs. Both deals follow the same basic framework, giving workers signing bonuses of at least $5,000, raising entry-level wages and moving work from other countries, including Mexico, to American plants.

 “Together with the jobs created in suppliers and other businesses supported by auto manufacturing, a total of 180,000 jobs will be added to the country’s battered economy” if the Ford and Chrysler agreements are approved, U.A.W. President Bob King said in the statement. The 180,000 includes the new G.M. jobs.

G.M. has said its new contract increases labor costs by just 1 percent annually, an amount that prompted Standard Poor’s to upgrade G.M.’s credit rating. Ford and Chrysler were waiting until their deals are ratified before discussing them in more detail.

Chrysler’s chief executive, Sergio Marchionne, last week described the G.M. and Ford deals as “overly generous.” Chrysler was the only one of the Detroit companies to lose money in 2010 — $652 million — but it has since repaid $7.5 billion in high-interest government loans that were its largest hindrance to profitability.

Ford workers were scheduled to finish voting on their contract next week. The first big plant to vote, a compact-car assembly plant in suburban Detroit, narrowly rejected the deal Tuesday. Some Ford workers have complained that they deserved larger bonuses or a pay raise, which they have not received since 2003.

“I have no doubt in my mind that the agreement will pass,” Jimmy Settles, the U.A.W. vice president in charge of negotiations with Ford, said in an interview Saturday.

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Ford Reaches Contract Deal With U.A.W.

Ford said the numbers include 6,250 jobs and $2.4 billion in investment that it had previously announced. The U.A.W. planned to provide more details at a news conference scheduled for later Tuesday.

“We really believe that it’s fair to our employees and recognizes the contribution that they’ve made to the success of Ford Motor Company,” John Fleming, Ford’s executive vice president of global manufacturing and labor affairs, told reporters at Ford’s headquarters.

Mr. Fleming declined to elaborate on how the deal affects Ford’s labor costs. He said nearly all of the new jobs will pay entry-level wages, which are currently about half as much as veteran workers earn. He said the entry-level pay scale would increase to be roughly on par with General Motors, which gave entry-level workers an hourly raise of $2 to $3 in a deal ratified last week, but he declined to give specific figures.

Ford said the deal brings work to the United States from Mexico, China and Japan. Including design work, engineering and other expenses, Ford said its total investment in the United States through 2015 would be $16 billion.

Bob King, the U.A.W.’s president, said most of the new jobs will be added by the end of 2012.

“This agreement adds another 5,750 new jobs to communities across America where people have been struggling to recover from our nation’s economic turmoil,” Mr. King said in a statement. “The American auto industry is on its way back.”

Negotiators remained at the bargaining table overnight Monday until reaching the agreement early Tuesday.

The U.A.W. had already called union officials from Ford plants across the country to meet Tuesday in Detroit in anticipation of a deal, even though normally it does not call such a meeting until a settlement has been reached. After those officials review the agreement, the union will present it to rank-and-file members for ratification.

The union’s next task will be reaching an agreement with Chrysler. Talks with that company have been ongoing but union leaders chose to focus on Ford first when talks with Chrysler bogged down. The 2007 contract with Chrysler has been extended through Oct. 19.

Analysts expected the union’s contract with Ford deal to look similar to the G.M. deal, but with some terms made more favorable to reflect the fact that Ford was the only Detroit automaker that did not go through bankruptcy protection in 2009.

G.M.’s deal gives workers a $5,000 signing bonus and $1,000 in each of the other three years. Ford workers — who, unlike their counterparts at G.M. and Chrysler, did not have to give up their right to strike if negotiations broke down — have been vocal about their desire for larger bonuses.

The G.M. deal also calls for creating or retaining 6,400 jobs in the United States, moving some work to American plants from Mexico and raising pay for entry-level workers. G.M. workers earning full wages did not receive a pay raise.

Bill Vlasic contributed reporting.

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