Ford And UAW Reach Early Morning Agreement

Ford and United Auto Workers negotiators reach an agreement
The United Auto Workers union said early Saturday it reached a tentative four-year contract agreement with Ford Motor Co., avoiding even the threat of a strike against the struggling automaker.

The deal, reached at about 3:20 a.m., must be ratified by the UAW's approximately 60,000 members at Ford. If approved, it would bring a close to historic negotiations that have yielded agreements designed to return the struggling U.S.-based automakers to profitability.

Details of the Ford agreement were not immediately released, but the deal likely will be close to what was negotiated with General Motors Corp. and Chrysler LLC.

Those pacts - which were reached after short strikes against the automakers - include a union-run trust that would take over the companies' retiree health care obligations, a lower-tier wage scale for some workers and some job security pledges.

The Ford deal came after a bargaining session that lasted more than 41 hours inside automaker's world headquarters building in Dearborn.

"Our bargaining committee came through for our active and retired members," UAW President Ron Gettelfinger said in a statement.

The deal encourages Ford to invest in its products while addressing the economic needs of union members, Gettelfinger's statement said.

"We face enormous challenges and we also have enormous potential," UAW Vice President Bob King said in the statement. King, the chief union negotiator with Ford, said the union's goals were to win new product and investment from the company, get job security and protect seniority rights.

"We made progress in all these areas," he said.

Gettelfinger involvement in the bargaining on Friday indicated that the negotiations were becoming more serious, according to a person close to the process that asked not to be identified because the private nature of the meetings.

The talks have been under way on and off since Thursday morning.

Negotiators were weighing the UAW's demand for promises that new vehicles will be built at U.S. factories against the company's desire to further downsize its manufacturing capacity to match lower demand for its products, both people said.

One of the people said Ford wanted to reduce its U.S. hourly work force by another 13,000 employees through additional buyout and early retirement programs. The union wanted the company to spare from closure some of the six factories that it intends to shutter, both people said.

Ford already has announced its intent to shut down 16 factories as part of a restructuring plan. The company has identified 10 of the closures, but has yet to announce the remaining six. The closures are to be fully completed by 2012.

If more workers leave, some of them could be replaced by so-called "noncore" employees who would be paid on a lower wage scale, starting around $14 per hour. An average Ford hourly worker made $28.88 per hour in 2006, according to the company. The change would help make Ford more competitive with its Japanese rivals that have U.S. factories.

Going into this year's contract talks, U.S.-based automakers said they have about a $25-per-hour total labor cost gap when compared with the Japanese.

Negotiators had been haggling over the level of financing for a union-run trust that would take over Ford's retiree health care obligations and the number of workers who will get the lower wages. The UAW agreed to the health care trusts and the lower wages in contracts that were already approved at General Motors Corp. and Chrysler LLC.

The UAW called short strikes against GM and Chrysler as a way to speed negotiations. It would be required to give Ford 72 hours' notice before calling a strike against the automaker.

Even after reaching an agreement, ratification may be made difficult by Chrysler's actions on Thursday to cut 8,500 to 10,000 hourly jobs and 2,100 salaried jobs through 2008, or about 15 percent of its work force. The cuts come on top of 13,000 Chrysler layoffs that were announced in February.

Thursday's layoffs came less than a week after Chrysler workers ratified a new four-year deal with the company that had job security guarantees at many plants at least for the life of the contract.

Under the new contract, workers who are laid off will get about 95 percent of their pretax pay for 48 weeks, then would go into a "jobs bank" for up to two years if there are no jobs open in the company. After the two years, the UAW and Chrysler would negotiate a plan for workers, a summary of the contract says.

But Gary Walkowicz, a worker and former local union official at a Ford truck plant in Dearborn, said talk on the assembly line Thursday was that workers at Chrysler and GM were deceived by job security pledges.

"It's pretty clear that both at General Motors and Chrysler, the workers were lied to," Walkowicz said. "They were promised job security. The ink wasn't dry on the contract and they're turning around and making layoffs."

In October, GM announced layoffs of more than 1,700 people at three plants in the Pontiac, Detroit and Lansing areas.

GM spokesman Tom Wickham said his company's job cuts were planned well in advance of the contract and were based on demand for products.

Chrysler Vice Chairman and President Tom LaSorda said in an interview Friday on "The Paul W. Smith Show" on WJR-AM that the decisions also were based on lower demand.

"We're right-sizing the company based on what's happening in the market," he said. "I don't think it's a permanent move."

Ford's four-year contract with the UAW expired Sept. 14 but has been extended while negotiations continue. The contract covers nearly 60,000 U.S. hourly workers.

Ford is the weakest automaker financially in this year's round of contract talks. The No. 2 U.S. automaker lost more than $12 billion last year and has mortgaged its assets - including its blue oval logo - to fund its turnaround plan.

The company is expected to announce next week that more than 30,000 hourly workers have taken previous early retirement or buyout offers to leave Ford.

Ford spokeswoman Marcey Evans and UAW spokesman Roger Kerson would not comment on the talks.