Even as ratification of General Motor Co.’s tentative agreement was delayed because of rejection from skilled trades workers Friday, Ford Motor Co. and the United Auto Workers reached their own tentative agreement that is the richest among the Detroit three automakers.
The proposed Ford deal includes a $10,000 total signing bonus – $8,500 plus $1,500 advance in profit sharing – and $9 billion in U.S. plant investments, according to two sources familiar with the deal who asked to remain anonymous because details have not been shared with UAW leaders.
The Ford pact also would include $1,750 in additional annual bonuses and would pattern wage increases for veteran workers after the deal ratified by Fiat Chrysler Automobiles workers and the tentative agreement reached between GM and the UAW, according to a source.
GM’s contract has a $8,000 signing bonus for all workers and $2,000 for temporary workers; Fiat Chrysler’s signing bonus was up to $4,000 for veteran workers and $3,000 for entry-level workers.
Ford’s agreement also includes moving entry-level workers to traditional workers’ health care plans, similar to the GM pact; would include $70,000 early retirement buyouts based on seniority; and does not change Ford’s profit-sharing formula that pays hourly workers $1 for every $1 million in North America profits.
The Ford National Council will meet at 10 a.m. Monday to review the tentative agreement. If the council approves it, it will be taken to rank-and-file for ratification voting that likely would start later in the week.
The UAW late Friday released final voting results for the tentative GM pact that would cover 52,600 workers. The union said 58.3 percent of GM production workers voted for it, while 59.5 percent of skilled trades workers voted against it. Overall, 55.4 percent of GM hourly workers supported the deal.
But GM’s contract has not been ratified. The UAW said in a statement Friday that it will hold meetings with skilled trades members at each plant to determine “what reason(s) they had for rejection of the tentative agreement. Once that inquiry has concluded, the UAW’s International Executive Board shall meet to determine what appropriate steps shall be taken. The results of this process cannot change aspects of the agreement which are common to all members.”
UAW President Dennis Williams and Vice President Cindy Estrada held a conference call Friday afternoon with UAW-GM local presidents and shop chair people, advising them to meet with skilled trades workers by early next week, according to two sources familiar with the call.
Both skilled trades and production workers must ratify the deal separately. Each group has parts of the contract tailored to their classifications.
The union needs to find out if skilled trades are voting against the pact because of issues related to their classification or whether it’s for monetary issues, according to the sources. The union likely then will decide whether to strike; attempt to negotiate further with the company on specific skilled trades issues; or decide that skilled trades workers primarily voted down the contract due to economic issues instead of issues unique to skilled trades workers.
The UAW can overrule a rejection by skilled trades workers if the union finds they voted against it for reasons other than issues unique to skilled trades. That happened in 2011, when the majority of skilled trades workers at Chrysler Group LLC (now Fiat Chrysler Automobiles US) voted against the deal. Then-UAW President Bob King and the board ratified the whole contract because skilled trades can veto a pact based only on their portion, not shared areas such as raises, vacation days and attendance policies.
A GM spokeswoman would not comment specifically on the skilled trades rejection.
“General Motors is pleased that a majority of UAW-represented employees recognize the benefits of the 2015 UAW-GM national agreement and voted in favor of it,” the automaker said in a statement late Friday.
While the UAW has yet to ratify a deal with General Motors Co., it’s not unprecedented to come to a tentative agreement with another automaker while talks go on elsewhere. In 2011, the union reached a tentative deal with Chrysler while Ford voting was taking place.
“It’s not that unusual,” said Art Schwartz, a former negotiator with GM and president of Labor and Economics Associates. “They’ve had a month and a half to see this circus go down. They’ve had an opportunity to bargain; it’s not like they’re sitting there playing poker.”
Ford had been waiting for its turn at the negotiating table since the contract with the union expired Sept. 14 and was extended. Talks had ramped up in the past few days.
The UAW chose first to negotiate more intensely with Fiat Chrysler, and that first contract was struck down by a 2-to-1 margin. A second deal with Fiat Chrysler was ratified with a 77 percent majority. That deal included the eight-year wage progression to essentially eliminate the tier-two pay system. The union then moved onto negotiations with GM and the two sides came to a tentative agreement late Oct. 25, avoiding a possible strike.
In a statement about the Ford pact, UAW Vice President Jimmy Settles said, “This agreement is significant for our members in that it creates a clear path for economic advancement for active members and rewards veteran employees for their sacrifices in recent years. It is one of the richest agreements in the history of UAW-Ford.”
UAW President Dennis Williams said the proposed tentative deal will “solidify job security and create substantial economic gains for our hard-working members and their families.”
Ford’s average hourly labor cost is the highest of the Detroit three, at $57, according to the Center for Automotive Research. Of Ford’s roughly 52,900 UAW members, about 29 percent are second-tier workers, more than GM’s 21 percent, but far fewer than Fiat Chrysler Automobiles NV’s 45 percent. Ford has had a 20 percent cap on its number of second-tier or entry level workers, and earlier this year transitioned about 800 to first-tier pay.
Frank Heintz, a 60-year-old skilled tradesman at Ford’s Dearborn Truck Plant, said he expected a deal that would mirror GM’s, although he’s still undecided whether he would vote in favor of it.
“To me the biggest issue of all was the question of the lower tier; having multiple tiers undermines the whole idea of solidarity,” he said. “My major reservation about this agreement is that there are temporary workers who may go for a long period of time without the full benefits.”
He said he’s hoping the deal would secure products and jobs in the United States.
“We have to make sure we don’t ratify a contract that’s going to empower the company to move vast numbers of jobs offshore,” he said.
If ratified by UAW members of GM, the Detroit automaker’s tentative agreement with the union includes the first hourly wage increase in nearly a decade for veteran workers, an $8,000 signing bonus for all workers and $2,000 for temporary workers, and the elimination of the pay gap between veteran workers and newer hires over eight years.
It also would move entry-level workers to the same health care plan as veteran workers in January, award workers an annual $1,000 performance bonus and an additional $500 bonus when quality targets are met, and offer up to 4,000 eligible employees a $60,000 early retirement bonus. GM’s pact includes $1.9 billion of investment at 12 U.S. facilities, creating or retaining 3,300 jobs at a dozen plants through 2019.
UAW-Ford contract highlights
■$10,000 total signing bonus: $8,500 plus $1,500 advance in profit sharing
■$9 billion investment in U.S. plants over four years
■$1,750 in additional annual bonuses
■Wage increases for traditional workers: 3 percent wage increases in years one and three, and 4 percent lump sums in the second and fourth year, same as GM and FCA’s deal
■Eight-year progression for second-tier workers to reach top pay
■Second-tier workers would receive first-tier worker health care plans, similar to GM’s deal
■$70,000 early retirement buyouts for a still to-be-determined number of eligible workers, $10,000 more than what is offered in GM’s pact