United Automobile Workers Approve Four-Year Ford Contract

LCT Staff
Posted on November 14, 2007

DETROIT — United Automobile Workers (UAW) members at Ford Motor approved a new four-year contract by the widest margin of any auto company, the union said today.

Over all, 79% of union members approved the agreement, which is similar to contracts reached at General Motors and Chrysler. The union said 81% of production workers voted in favor of the contract, while 71% of skilled trade workers approved it.

The Ford agreement covers 54,000 active workers. Like those at the other Detroit companies, it expires in 2011.

The approval wraps up a tumultuous and landmark set of negotiations that prompted brief strikes at GM and Chrysler before the agreements were reached. Both those companies announced job cuts soon after workers approved their respective deals.

Unlike those companies, the deal at Ford was reached without a walkout and without union leaders setting a strike deadline.

The UAW “came away with a creative agreement that addresses the concerns of our members, and also gives the company the opportunity to move forward,” the union’s president, Ron Gettelfinger, 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.”

Approval of the Ford contract seemed likely after the company pulled back on plans to close a number of factories which it had planned to shut under a restructuring program.

Ford had originally planned to close 16 factories, but had identified only 10. Under the deal, the remaining six will be spared, although Ford keeps the ability to indefinitely shut plants if its sales deteriorate.

Ford also said it would delay the closing of two plants, in St. Paul and Cleveland, for a year. Both were scheduled to close in 2008.

The highlight of the new union contracts is the creation at each company of a voluntary employee benefit association, or VEBA, which will take responsibility for retiree health care benefits.

The automakers will shift responsibility for nearly $100 billion in current and future liabilities to the VEBA trusts, which will be run by a board that includes union representatives.

GM, Ford, and Chrysler are contributing cash and stock to start the trusts, which are expected to be created in 2010 after court and regulatory approval.

The other main feature of the new contracts is a two-tier wage system under which newly hired workers will receive sharply lower wages and less-generous benefits than current employees.

Each company also is expected to offer buyouts and other incentives to senior workers to encourage them to retire. Tens of thousands of auto workers in Detroit took advantage of such offers before the labor negotiations began.

SOURCE: New York Times

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