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Ford Workers OK Contract; UAW Says It Ends Two-Tier Pay

November 18, 2019

By Steve Wishnia

“This is a life-changing contract,” says Acting President Rory Gamble.

DETROIT, Mich.—United Auto Workers members have ratified a four-year contract with Ford, the union announced Nov. 15. The agreement was approved by 56.3% of the voters.

The deal will cover more than 55,000 workers. It will phase out the two-tier contract the UAW agreed to in 2009, Acting President Rory Gamble, head of the union’s Ford department, said in a message to members. 

“Every Ford employee and temporary employee will be at the top-rate for full-time status at the end of this four-year agreement,” he said. “This is a life-changing contract for many, and provides a template for all future Ford UAW members to a full-time, top-rate status. There will be no more permanent temporary situations and no more permanent tiers.”

Otherwise, the contract is similar to the one the UAW reached with General Motors in October. Workers will get a bonus of 4% of salary this year and in 2021, and 3% raises in 2020 and 2022, as well as a signing bonus of $9,000 for full-time workers and $3,500 for temporary workers. The deal will not increase workers’ health-care costs, which Ford had initially sought. They will remain at 3% of pay.

It will allow Ford to increase its use of temps, now 6% of its workforce. It sets the maximum number at 8% company-wide and 10% at individual plants, unless the union and the company agree to allow more.

“We are pleased that we were able to reach an agreement quickly with the UAW without a costly disruption to production,” Joe Hinrichs, president of Ford’s automotive division, said in a statement. “This deal helps Ford enhance our competitiveness and protect good-paying manufacturing jobs. Working with the UAW, we have added flexibility to our operations while keeping labor costs in line with projected U.S. manufacturing labor inflation costs, and still rewarded our workers for their important contributions to the company.”

Ford also agreed to invest $6 billion in its U.S. factories, including $1 billion at the Kentucky Truck Plant in Louisville, which has almost one-sixth of its U.S. workers. Some of that will go to add hybrid technology to SUVs made there.

“Ford’s commitment to job security and assembly in the United States is a model for American manufacturers,” Gamble said.

The contract, however, agrees to the closing of Ford’s engine plant in Romeo, north of Detroit. The 600 UAW workers there will be offered jobs at the Van Dyke Transmission Plant in Sterling Heights, about 15 miles south.

UAW members at Romeo voted against ratification by 442-48. In Louisville, where Local 862 represents more than 12,000 workers at the Louisville Assembly Plant and Kentucky Truck Plant, production workers voted no by a 2-1 margin, but skilled-trades workers narrowly favored the deal. Local 862 members had also opposed ratifying the 2015 contract.

Bargaining with Fiat Chrysler Automobiles, the third of the “Detroit Three,” will begin Nov. 18. While the GM and Ford contracts have set a pattern, the Fiat Chrysler talks will be complicated by that most of its more than 47,000 workers are the lower pay tiers of the current contract: 59% are “in progression,” permanent workers hired after 2007, and 13% are temps. Fiat Chrysler has also been implicated in the UAW’s bribery-and-embezzlement scandal, with one former vice president sentenced to 5½ years in prison last year for stealing more than $2.6 million from a joint training fund.

UAW vice president Cindy Estrada,director of the union’s FCA department, told members in early October that bargaining subcommittees were close to completing agreements on all issues other than those that are “economic or patterned.”

November 18, 2019

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