Changes OK'd at Ford

UAW workers reluctantly approve contract modifications

March 10, 2009|By McClatchy-Tribune

DETROIT: UAW workers at Ford Motor Co. reluctantly ratified an agreement that reduces their benefits, break time and potentially weakens the fiscal soundness of a retiree health care fund in an effort to help the ailing automaker survive the global recession.

The United Auto Workers said yesterday that 59 percent of production workers and 58 percent of skilled-trades workers voted in favor of the agreement during elections at locals nationwide.

"Once again, UAW members have stepped up to make the difficult decisions necessary to deal with the reality of the current economy, the deteriorating auto industry as a whole and specifically the negative impact the economic climate is having on Ford Motor Co.," UAW President Ron Gettelfinger said. The agreement is designed to help Ford survive 2009 without asking for government loans. Ford, the only domestic automaker to forgo federal loans, is struggling as it faces the worst industry conditions in decades.

The Dearborn, Mich., automaker posted a record loss of $14.6 billion last year, and industry conditions have been worse this year. Sales of Ford's cars and trucks dropped 48.5 percent in February.

"This is about the biggest the stakes could possibly be," said Gary Chaison, professor and labor expert at Clark University in Worcester, Mass.

If UAW members had rejected the contract, Ford might have been forced to ask for federal loans, Chaison said.

With yesterday's ratified agreement, Ford further distinguishes itself from General Motors Corp. and Chrysler LLC, which have received $17.4 billion in federal bridge loans and are still in talks with the UAW for similar labor concessions.

"This will establish a model for GM and Chrysler," Chaison said.

The new agreement, which will last until 2011:

* Eliminates a holiday and suspends a Christmas bonus.

* Cuts break time and suspends cost-of-living increases and performance bonuses.

* Offers buyouts.

* Allows Ford to fund a retiree trust fund - Voluntary Employee Beneficiary Association - partially with stock instead of all cash.

Ford praised the UAW's willingness to quickly reach an agreement that helps Ford react to the worst industry sales in decades.

"By working together with our UAW partners, we identified solutions that will help Ford reach competitive parity with foreign-owned auto manufacturers and that are important to our efforts to operate through the current economic environment without accessing a bridge loan from the U.S. government," Joe Hinrichs, Ford's group vice president of global manufacturing and labor affairs said in a statement.

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