Ford's union workers ratify new contract

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Union workers at Ford Motor Co. overcame early opposition to a new four-year contract with the company and overwhelmingly approved the deal in voting that lasted two weeks.

More than 26,000 workers, or 63 percent of those who cast ballots, voted in favor of the pact, while almost 15,000, or 37 percent, opposed it, the UAW said in a statement Wednesday.

The vote means that new contracts have been approved at Ford and General Motors Co., with Chrysler workers just starting to vote on their deal. At all three companies, the union agreed to profit sharing and signing bonuses instead of annual pay raises, a novel concept that helps the companies control their costs yet rewards workers.

The contracts set the wages and benefits for 112,000 auto workers nationwide, and also influence the pay at auto plants owned by foreign companies, auto parts supply companies and other industries.

As part of the deal at Ford, the company promised $4.8 billion in new investments in its U.S. plants and 5,750 new jobs.

Most workers won't get annual raises under the contract, but they will get profit-sharing checks, inflation adjustment payments and other bonuses worth at least $16,700 through 2015. The deal at GM was similar, but the Chrysler pact has far smaller signing bonuses and profit-sharing checks.

UAW Vice President Jimmy Settles, the union's top Ford negotiator, said in a statement that workers at Ford were frustrated with the economy, a lack of pay increases and what he called "outrageous" pay packages for executives, yet they still approved the pact. Eighty-five percent of the union's members at Ford cast ballots, he said.

"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," union President Bob King said.

Despite the signing bonuses and profit-sharing, analysts expect a minimal impact to Ford's labor costs, in part because most of the new workers will be hired at lower wage rates than the company's longtime workers. Brian Johnson, an auto analyst with Barclays Capital, estimates the contract will add around $70 million to Ford's labor costs each year. If large numbers of older workers leave the company, Ford will spend even less, he said.

Johnson said Ford could see immediate benefits from the union approval in the form of a ratings upgrade, which would help lower its borrowing costs. Standard & Poor's Ratings Service has said it expects to raise Ford's corporate credit rating to "BB+" — which is one notch below investment grade — if the labor agreement is ratified.

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Chrysler, autos union agree on labor contract

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Carlos Osorio / AP

Cars are seen on a Chrysler assembly line in Sterling Heights, Mich.

The United Auto Workers (UAW) union and Chrysler have reached a tentative four-year labor contract deal, the automaker said on Wednesday.

The deal follows agreements between the UAW and Chrysler's Detroit rivals General Motors and Ford. The UAW deal is Chrysler’s first since its bankruptcy and government bailout in 2009. It covers its 26,000 hourly production workers.

The agreement is subject to UAW member ratification. The GM contract was ratified by its workers late last month and Ford workers are in the process of voting that ends Oct. 18.

UAW President Bob King said in a press statement that the Chrysler pact will create 2,100 U.S. jobs and will include $4.5 billion in investments to produce new models and upgraded vehicles and components by 2015.

“Less than three years ago, Chrysler was teetering on the edge of bankruptcy as our nation was thrown into the worst economic crisis since the Great Depression,” King said. “This tentative agreement builds on the momentum of job creation and our efforts to rebuild America by adding 2,100 new jobs by the end of the agreement in 2015 to communities left in turmoil in the wake of the country’s economic collapse.”

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Ford, UAW Have New Labor Contract

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By Bill Visnic October 19, 2011

After early uncertainty about the popularity with rank-and-file members of a proposed new four-year labor contract with Ford Motor Co., the United Auto Workers (UAW) union announced today it has ratified the agreement, with about 63 percent of UAW hourly workers voting to approve the deal. The contract, running through 2015, provides for about 5,750 new U.S. jobs, including some “insourced” to the U.S. that formerly were in Mexico, China and Japan, solidifies a home for the iconic Ford Mustang and guarantees an investment of $6.2 billion in Ford’s U.S. plants.

The new agreement covers about 41,000 UAW hourly workers, by Ford’s count. In a release, the UAW said the contract includes a $6,000-per-worker signing bonus and “$7,000 in Inflation Protection and Competitive lump-sum payments over the term of the agreement, a new, more transparent and simple profit sharing plan in which workers will receive their first payment averaging $3,700 this year. Entry-level wages were also increased to $19.28 over the term of the agreement.” Entry-level or so-called “second-tier” wages started at about $14 per hour under the prior contract. The inflation-protection payments to each worker are $1,500 annually starting in 2012.

“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,” said UAW President Bob King. He said the 5,750 new UAW jobs provided for in the four-year contract brings to 12,000 the number of new jobs at Ford. And the company’s total investment in new vehicles and component-making facilities will be $16 billion.

New Life For U.S. Plants
The new Ford-UAW labor agreement spells out numerous upgrades and new or upgraded products for several U.S. plants, including ones in Michigan and Ohio that were potential candidates for closure. Of particular note is the provision to install a “new, flexible assembly system” at Ford’s Flat Rock, Mich., plant to become the second-source plant for the Fusion midsize sedan, which currently is built exclusively in Hermasillo, Mexico. The plant, already producing the Mustang coupe and convertible, also was confirmed as the assembly site for the next-generation Mustang. Ford’s Ohio Assembly plant in Avon Lake, Ohio, which was widely speculated as ripe for closure, wins production of medium-duty (F-650 and F-750) trucks that currently are produced in a joint venture operation in Mexico. The plant also will produce motorhome and commercial-vehicle “stripped chassis,” after the plant discontinues production of the hoary E-Series fullsize van. Ford said the E-Series will continue to be produced “in certain variations through most of the decade.”

The contract’s largest investment commitment comes at Ford’s Kansas City, MO, assembly plant, where $1 billion will go to add production of the Transit fullsize commercial van, the larger brother of the Transit Connect Ford introduced in 2008 and currently is imported from Turkey. The company will build a new stamping facility at the site to accommodate the Transit. The Kansas City plant also add a second shift of F-Series truck production next year. The contract spells out other upgrades and future-product commitments, which can be found in full detail here, including confirmation that Ford will indeed close its Twin Cities assembly plant in Minnesota this year, marking the end of the Ranger midsize pickup truck.

Another notable disclosure in the new labor contract details a “new, industry leading small V6” to be built at Ford’s Lima, Ohio, engine plant – presumably to replace the 3.0-liter Duratec V6, which is phased out this year and had been in production for 18 years. Ford also is adding capacity to fit 6-speed automatic transmissions in two new vehicles and is phasing out production of 4-speed automatics.

Bill Visnic:  is an AutoObserver Senior Editor. Follow @AutoObserver on Twitter

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Ford's union workers ratify new contract

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Union workers at Ford Motor Co. overcame early opposition to a new four-year contract with the company and overwhelmingly approved the deal in voting that lasted two weeks.

More than 26,000 workers, or 63 percent of those who cast ballots, voted in favor of the pact, while almost 15,000, or 37 percent, opposed it, the UAW said in a statement Wednesday.

The vote means that new contracts have been approved at Ford and General Motors Co., with Chrysler workers just starting to vote on their deal. At all three companies, the union agreed to profit sharing and signing bonuses instead of annual pay raises, a novel concept that helps the companies control their costs yet rewards workers.

The contracts set the wages and benefits for 112,000 auto workers nationwide, and also influence the pay at auto plants owned by foreign companies, auto parts supply companies and other industries.

As part of the deal at Ford, the company promised $4.8 billion in new investments in its U.S. plants and 5,750 new jobs.

Most workers won't get annual raises under the contract, but they will get profit-sharing checks, inflation adjustment payments and other bonuses worth at least $16,700 through 2015. The deal at GM was similar, but the Chrysler pact has far smaller signing bonuses and profit-sharing checks.

UAW Vice President Jimmy Settles, the union's top Ford negotiator, said in a statement that workers at Ford were frustrated with the economy, a lack of pay increases and what he called "outrageous" pay packages for executives, yet they still approved the pact. Eighty-five percent of the union's members at Ford cast ballots, he said.

"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," union President Bob King said.

Despite the signing bonuses and profit-sharing, analysts expect a minimal impact to Ford's labor costs, in part because most of the new workers will be hired at lower wage rates than the company's longtime workers. Brian Johnson, an auto analyst with Barclays Capital, estimates the contract will add around $70 million to Ford's labor costs each year. If large numbers of older workers leave the company, Ford will spend even less, he said.

Johnson said Ford could see immediate benefits from the union approval in the form of a ratings upgrade, which would help lower its borrowing costs. Standard & Poor's Ratings Service has said it expects to raise Ford's corporate credit rating to "BB+" — which is one notch below investment grade — if the labor agreement is ratified.

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Chrysler, Auto Union agree on contract

Carlos Osorio / AP

Cars are seen on an assembly line of Chrysler in Sterling Heights, Michigan.

The Union United Auto workers (UAW) and Chrysler have a preliminary four-year work contract offer, reached the automaker said on Wednesday.

The deal follows agreements between the UAW and Chrysler Detroit rivals General Motors and Ford. The UAW deal is Chrysler bailout for the first time since its bankruptcy and Government in 2009. It includes 26,000 production workers.

The agreement is subject to UAW member ratification. The GM Treaty was ratified at the end of its workers last month and workers are in the process of which vote Ford, ends Oct. 18.

UAW President Bob King said in a press statement, that the Chrysler Pact created 2,100 jobs in the United States and also will be $4.5 billion in investments to upgraded vehicles with new models and components by 2015.

"Less than three years, Chrysler was moving on the verge of bankruptcy as our nation in the worst economic crisis since the great depression, was thrown", King said. "This provisional agreement builds on the dynamics of job creation and our efforts rebuild America by adding communities, the economic turmoil in the wake of the country left at the end of the agreement in the year 2015 reduce 2,100 new jobs."

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Chrysler And UAW Reach Tentative 4-Year Contract

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By Bill Visnic October 12, 2011

Chrysler Group LLC announced today that the company reached a tentative agreement with the United Auto Workers union on a new 4-year labor agreement. Chrysler is the last of the Detroit Three automakers to reach a tentative pact with the UAW; General Motors Co.’s contract has been ratified, while Ford’s tentative agreement is currently with its rank-and-file workers for ratification, with the final results of the nationwide voting expected today. Chrysler did not disclose terms of the tentative new 4-year contract, which requires ratification by its 26,000 hourly employees.

But UAW president Bob King did release a statement that gave broad indications about the scope of the contract. “This tentative agreement builds on the momentum of job creation and our efforts to rebuild America by adding 2,100 new jobs by the end of the agreement in 2015,” King said. The union added that Chrysler plans to invest $4.5 billion in the U.S. to manufacture new and refreshed models and new major components produced in UAW plants.

Chrysler’s agreement with the UAW likely is comprised of many of the same basic aspects as the contracts reached with GM and Ford. The primary features of those contracts included large signing bonuses for all workers – $5,000 per worker in the case of the ratified GM contract – increased wages for so-called “tier two” newly-hired workers and some type of profit-sharing program that increases payouts to UAW workers based on metrics of the company’s success.

There was tension in the process, however, including a highly-publicized letter from Chrysler CEO Sergio Marchionne that in a prickly tone accused the UAW’s King of delaying the contract negotiations to concentrate on the UAW’s talks with Ford. Marchionne also publicly said that Chrysler could not afford to the same concessions won from GM and Ford, particularly the increase in hourly wages for the second-tier workers. Reports then indicated the UAW believed it was close to an agreement with Chrysler this weekend, but the agreement did not come. It wasn’t until Wednesday morning that Chrysler announced the parties had reached the tentative agreement that now will go before workers for a vote. Chrysler and the UAW had extended the current contract until October 19.

Bill Visnic:  is an AutoObserver Senior Editor. Follow @AutoObserver on Twitter

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Auto workers union endorses new contract

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Union leaders from General Motors factories around the country have endorsed a new four-year contract with the automaker, the Associated Press reports.

They are recommending that GM's 48,500 factory workers approve the deal in votes during the next week, the news wire said, noting that:

The agreement reached Friday includes a $5,000 signing bonus and improved profit-sharing instead of hourly pay raises for most of the workers. About 2,400 entry-level workers will get raises. They now make $14 to $16 per hour, about half the pay of a longtime UAW worker.

Profit-sharing will be a minimum of $3,500 next year.

The union now will focus on negotiations with Chrysler, and Ford will be next.

Since Chrysler isn't making as much money as GM, workers there probably won't see as good of a deal.

CNBC's Phil LeBeau has more details:

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GM-UAW agree on new contract

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DETROIT — General Motors Co. and the United Auto Workers, sobered by the government bailout and bankruptcy at the automaker just two years ago, reached a tentative agreement on a new four-year contract without the public acrimony or strikes that have plagued the talks in the past.

Details weren't immediately released, but the union said the agreement includes some of its major goals, including assurances of new products for U.S. plants, improved health care benefits and a profit-sharing plan. The union said the plan will put laid-off members back to work.

"When GM was struggling, our members shared in the sacrifice. Now that the company is posting profits again, our members want to share in the success," UAW Vice President Joe Ashton, the chief negotiator with GM, said in a statement. "The wages and benefits we negotiated in this tentative agreement reflect the fact that it was UAW members who helped turn this company around."

UAW President Bob King, who was reached by phone Friday night, said he wouldn't comment on the agreement until after he has met with local union leaders.

The contract covers 48,500 GM workers in the U.S. GM was the first of the Detroit Three to reach an agreement with the UAW. Chrysler Group and Ford Motor Co. are still negotiating.

The UAW announced the agreement just after 11 p.m. EDT Friday (0300 GMT Saturday), after a little more than seven weeks of closed-door bargaining.

The UAW's contract with GM expired Wednesday, but the union had extended it indefinitely while negotiators continued to talk. In the past, workers might have gone on strike when the deadline passed. But this year, GM and Chrysler workers had limited ability to strike under the terms of the companies' government bailouts two years ago. These talks are the first since GM and Chrysler needed government aid to make it through bankruptcy protection in 2009.

Workers must vote on the plan before it will take effect. Union leaders from around the country have been asked to come to Detroit Tuesday to learn the details so they can explain them to their members. GM says a vote is expected in the next week to 10 days.

"We used a creative problem solving approach to reach an agreement that addresses the needs of employees and positions our business for long-term success," said Cathy Clegg, GM's vice president of labor relations. "We worked hard for a contract that recognizes the realities of today's marketplace."

Talks between GM, Ford and Chrysler determine the wages for 112,500 factory workers at all three companies. They also set the bar for wages at auto parts companies, U.S. factories run by foreign automakers and other manufacturers, which employ hundreds of thousands of people.

The White House also will be watching the outcome of the talks. GM received $49.5 billion in government bailout funds two years ago and is still part-owned by the U.S. Treasury. An agreement that is favorable to GM could help the company's stock rise, which would get the Treasury closer to making back the money it is owed when it sells its remaining shares.

GM began the talks paying its workers an estimated $56 per hour in wages and benefits, which is about the same amount that Ford and Toyota Motor Co. pay their U.S. workers but higher than Chrysler and Hyundai Motor Co.

After its wrenching trip through bankruptcy protection, GM is making money again. The company made $4.7 billion last year, its first annual profit since 2004. But it isn't eager to add costs after years of layoffs and plant closings.

The UAW has shown a willingness to work with GM to cut labor costs. Last fall, the union agreed to lower the wages of 40 percent of its workers at a Michigan plant so it can profitably build the subcompact Chevrolet Sonic there. In turn, GM has promised to invest in its U.S. workers and facilities. Earlier this summer, GM pledged to put $2 billion into 17 U.S. facilities over the next 18 months. The company says the investment will create or retain 4,000 jobs.

The UAW hopes to show that it can work cooperatively with auto companies as it tries to unionize U.S. factories owned by Nissan Motor Co., Honda Motor Co., Volkswagen AG and other foreign automakers. King said the union remains committed to organizing those plants.

"As long as unionized workers are being forced to compete with nonunion workers who in most cases receive lower pay and benefits — many in temporary jobs — there will continue to be a downward pressure on the wages and benefits of all auto workers," he said.

The union's focus on GM slowed the Chrysler negotiations and drew an angry response earlier in the week from CEO Sergio Marchionne.

Marchionne accused King of failing to show up at Chrysler's Auburn Hills, Michigan, headquarters to finalize a deal on Wednesday night. Marchionne then left the country, so it's unlikely a deal will be finalized until he returns next week.

Talks with Ford have made little progress while negotiations continue with the other two companies.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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