The tentative labor pact between Ford Motor Co. and the UAW is the richest of Detroit’s Big Three, and industry analysts say it avoids the hangups that stalled ratification of deals at Fiat Chrysler Automobiles NV and General Motors Co.
The Dearborn automaker’s tentative deal approved by the Ford National Council Monday in Detroit is now in the hands of 52,900 hourly employees, who will vote locally beginning this week.
It includes higher bonuses, richer buyout offers and more promised investments than labor pacts between the UAW and the other two Detroit automakers.
“I think they’re trying to avoid the pitfalls that the other two have encountered,” said Kristin Dziczek, director of the Industry & Labor Group at the Center for Automotive Research. “They don’t want to have either case repeat.”
Fiat Chrysler workers overwhelmingly turned down a first tentative agreement by 65 percent; and GM skilled trades workers last week voted down their agreement with the Detroit-based automaker, delaying final ratification.
“The big key is that (Ford) made a significant adjustment to the skilled trades,” said Art Wheaton, a labor expert at Cornell University. “It sounds like they’re trying to do a lot to get this thing ratified without a lot of the brouhaha.”
Overall, Ford’s skilled trades workers are expected to receive nearly $35,100 in new money over the four-year life of the deal — about $2,500 more than typical production workers. That’s in addition to profit-sharing, which the union says was worth about $30,000 for a typical worker during the 2011-15 contract.
The union said negotiators also “resisted the company’s attempt to further consolidate skilled trades classifications.”
GM’s skilled trades workers are expected to have some classifications consolidated, pending the contract’s ratification. That’s part of the reason why skilled trades workers late last week voted against GM’s tentative deal, forcing the union this week to hold follow-up meetings to determine what to do next. UAW local presidents and shop chairs Tuesday are to wrap up two days of meetings with GM skilled trades workers, but the UAW has not yet set a meeting for its International Executive Board to determine its next course of action, a union spokesman said Monday.
Hikes retroactive to Sept. 15
Ford’s deal includes a $10,000 total signing bonus: $8,500, plus a $1,500 advance in profit sharing. Temporary employees will receive $2,000. That’s more than the $8,000 GM workers would receive and the $3,000-$4,000 FCA workers got.
And because contract negotiations have taken so long, Ford workers will receive their wage increases retroactive to Sept. 15.
The Ford pact also pledges $9 billion in U.S. plant investments, including $4 billion investments in assembly operations, that will create or retain 8,500 jobs. It promises no plant closings over the four years of the contract.
As part of its production plans, Ford said in the contract that the Taurus, Focus, C-Max and Fusion would continue “through their product life cycle,” but not beyond that. Ford previously said it would end production of the Focus and C-Max in 2018 at its Michigan Assembly Plant in Wayne, and The Detroit News first reported in August that the Ranger truck would be built there in 2018. The Taurus is made at Chicago Assembly, while the Fusion is made at Flat Rock and in Mexico.
The contract “highlighter” document says only that Michigan Assembly will receive a new vehicle in 2018, and another no later than 2020.
In addition, the contract revealed that Ford will stop producing the Lincoln MKC at its Louisville Assembly Plant once its product life cycle is complete to make room to build more Escapes. It’s unclear where Ford intends to move MKC production.
The moratorium on plant closures is a big win for the Rawsonville, Sterling Axle and Woodhaven Stamping facilities, which were given new life with a new pay structure and in-sourcing at Woodhaven. Second-tier employees, who make less than veteran workers, will make $16.25-$19.86 at those plants, according to the contract.
“The significant new investments will strengthen job security and job growth over the long-term,” UAW President Dennis Williams said in a statement. “We worked hard to secure an agreement that provides a clear path to traditional wages for all members and substantial raises for traditional members for the first time in 10 years. Our members will have the final word, and we look forward to the conversation in the days ahead.”
The Ford pact also includes $1,750 in additional annual bonuses and patterns wage increases for veteran workers after the deal ratified by FCA workers and the tentative agreement reached between GM and the UAW.
First-tier workers will receive two, 3 percent base wage increases and two 4 percent lump sum bonuses over the course of the contract. Second-tier workers will have an eight-year grow-in period to reach top wages. Ford’s agreement also includes moving entry-level workers to traditional workers’ health care plans, similar to the GM pact.
New hires would top out at $28 an hour, according to the contract.
Ford had a 20 percent cap on the number of second-tier workers its could employ. With roughly 29 percent of its workers at that level, Ford before negotiations moved about 800 second-tier workers to first-tier status. During negotiations, Ford added about 300 more, bringing the total number of workers bumped up to top pay to about 1,100.
Select eligible skilled trades workers and all other hourly employees will be a part of targeted early retirement buyouts. The programs will provide gross lump-sum incentive payments of $70,000. Timing was not announced, citing it will be up to the automaker and union.
“This tentative agreement delivers substantial wins for members. It’s a hard-earned victory for our members, their families and our union,” UAW Vice President Jimmy Settles, said in a statement.
The deal does not change Ford’s profit-sharing formula that pays hourly workers $1 for every $1 million in North America profits, but it removed the cap on the amount of company profits captured in the profit-sharing plan. Previously, workers would not have been paid on any profits above $12 billion.
Ford’s 124,000 retirees will receive $1,000 over the contract’s four years.
Like at FCA and GM, Ford workers will receive 64 holidays over the course of the four-year pact, including the restoration of Easter Monday. Also following the pattern set at GM & FCA, Ford workers will have the day off on the actual Veteran’s Day holiday, not the long weekend normally reserved for the start of hunting season.
Ultimately, analysts believe the Ford deal will be ratified.
“You can’t take any ratification for granted; no matter how much they get they’re always going to want more,” Wheaton said. “But I would think of the three, this one should be a little better off for ratification.”
Ford product investment
■Chicago Assembly will receive $900 million investment:
Includes new Ford Explorer, new Police SUV Interceptor and a new vehicle to be named later, and Taurus will continue through current lifecycle
■Dearborn Truck will receive $250 million in investment:
F-150 will continue, new Ford Raptor will be added
■Flat Rock Assembly will receive $400 million investment:
Ford Mustang will continue, adds new Lincoln Continental and Fusion will continue through its lifecycle based on demand
■Kansas City Assembly will receive $200 million in investment:
Ford F-150 and Transit continue
■Kentucky Truck Assembly will receive $600 million in investment:
All-new Ford Super Duty truck and Ford Expedition and Lincoln Navigator continue with a major investment, in-sourcing of some work
■Louisville Assembly will receive $700 million investment:
All-new Ford Escape and current Lincoln MKC “will balance out” or move from the location, to allow capacity for Escape
■Michigan Assembly will receive $700 million in new investment:
New vehicle to be added in 2018, with additional product planned no later than 2020; Ford Focus and C-Max will move out
■Ohio Assembly to receive $250 million investment
Ford medium-duty truck continue, with new product to be announced