Ford Workers Agree to New Labor Deal
November 15 2019 - 7:58PM
Dow Jones News
By Nora Naughton
The United Auto Workers union said Friday they have secured a
new labor deal at Ford Motor Co., after unionized workers at the
company's U.S. factories voted to back the agreement.
About 56% of Ford's UAW members cast ballots supporting the new
four-year agreement, the union said. The deal largely mirrors one
struck at General Motors Co. last month, following a 40-day
nationwide strike that crippled the auto maker's U.S. manufacturing
operations.
The ratification gives union leaders momentum as they try to
complete contract talks in Detroit, turning to Fiat Chrysler
Automobiles NV next -- the last of the U.S. car companies to reach
a new labor accord with the UAW.
The new contract provides a clearer path to full wages for all
employees, acting UAW President Rory Gamble said. President of
Ford's automotive business, Joe Hinrichs, said the deal will
increase the auto maker's competitiveness and manufacturing
flexibility.
The now-ratified contract at Ford, covering 56,000
UAW-represented factory workers, includes wage increases, a cap on
the use of temporary employees and $6 billion in new U.S. factory
investment to add or retain 8,500 jobs. Full-time workers will also
get a $9,000 signing bonus.
In exchange, Ford can move ahead with closing an engine plant in
Michigan that employs 600 workers, a move that will help it lower
manufacturing costs, analysts say. The union said the closure won't
result in job loss because the affected workers will have the
option of transferring to a nearby plant.
Ford entered into contract talks this summer looking to tamp
down fast-rising health-care costs, which are on track to top $1
billion next year, say people familiar with Ford's bargaining
strategy. But the company ultimately agreed to no changes in the
employee health-care contributions, which are now set at 3%, a far
lower rate than the average paid by other private-sector
workers.
"It's the same deal as GM, and they did it without a strike,"
said Art Schwartz, a consultant and former bargainer for GM.
The UAW has sought to use the deal struck at GM as a template
for reaching similar agreements with Ford and Fiat Chrysler, as is
typical in pattern bargaining.
The contract agreement reached at GM, the U.S.'s largest car
maker by sales, set a high bar for its Detroit rivals, with
analysts projecting it will add to their long-term labor costs.
Ford already spends an average of $61 an hour on labor for its
UAW workforce, a figure that has grown over the past four years,
according to the Center for Automotive Research.
Any additional costs from this contract come as the company is
trying to restructure its global business to prepare for an
expected car-market downturn. Ford, last month, lowered its
full-year profit forecast, citing new cost pressures and a weaker
fourth quarter.
(END) Dow Jones Newswires
November 15, 2019 20:43 ET (01:43 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
Ford Motor (NYSE:F)
Historical Stock Chart
From Apr 2024 to May 2024
Ford Motor (NYSE:F)
Historical Stock Chart
From May 2023 to May 2024