Ford will be the next automaker to negotiate with the UAW

Ian Thibodeau
The Detroit News

Ford Motor Co. is next up to negotiate a new contract with the United Auto Workers.

UAW officials are moving to main table negotiations with the Dearborn automaker after General Motors Co. members — following a six-week strike — voted to ratify a contract that would set the pattern for UAW members at Ford and Fiat Chrysler Automobiles NV.

UAW officials decided to move to main table negotiations with the Dearborn automaker after General Motors Co. members — following a six-week strike — voted to ratify a contract that would set the pattern for UAW members at Ford and Fiat Chrysler Automobiles NV.

"Now that the General Motors strike has ended and the agreement has been ratified, we will proceed to Ford working with UAW Vice President Rory Gamble, Director of the UAW Ford Department and their staff," President Gary Jones said in a statement.

The UAW has had a better relationship with Ford in recent years, said Harley Shaiken, a professor at the University of California-Berkeley who studies labor relations. That likely played a role in the UAW's choice to move to negotiate next with the Dearborn automaker, which would be more likely to continue to set a patterned contract that is more favorable to the UAW.

The Dearborn automaker also has seasoned negotiators at the table, Shaiken said. Additionally, updates early this month said 18 of 20 subcommittees at Ford had tentative agreements or had negotiated to the point where they needed GM to set the pattern while subcommittees at Fiat Chrysler were close but still meeting.

"In that sense, it may have seemed like a better route to continuing the pattern and to achieving a settlement quickly," Shaiken said. "Ford is more likely to get a settlement sooner, and I think that’s what the UAW was looking for."

Ford has some advantages as the second company, he added: "You have to face these issues, but you can tailor it a bit more to your liking. That establishes a precedent that the final company has to face in its negotiations."

In a statement, Ford spokeswoman Kelli Felker said: "We can confirm the UAW today notified Ford it plans to negotiate with us next. As America’s No. 1 producer of vehicles and largest employer of UAW-represented autoworkers, we look forward to reaching a fair agreement that helps Ford enhance its competitiveness and preserve and protect good-paying manufacturing jobs."

The contract ratified by GM-UAW members Friday pays record ratification bonuses to members, ensures paths to permanent employment for temporary workers, and promises wage increases for members who'd been paid less than their more their legacy counterparts. That could be expensive for Ford if the pattern were to be followed exactly, though experts said the contract is likely to be tweaked as the two remaining automakers move through their own negotiations with the UAW.

"Ford and Chrysler are going to think this is a little expensive," said Arthur Schwartz, president of Labor and Economics Associates in Ann Arbor and the former general director of labor relations at GM. "But the UAW's been known to adjust."

Ford's relations with the UAW differ greatly from those between the union and its crosstown rival. The Dearborn automaker doesn't have as large of a manufacturing presence in Mexico as GM; Ford also isn't burdened with the same excess-capacity issues as the Detroit automaker. 

Group prayer to mark the end of the strike outside the Detroit-Hamtramck assembly plant in Detroit after the end of the strike in Detroit, Michigan on October 25, 2019.

But Ford also doesn't make as much money as GM — and it has the largest U.S. manufacturing footprint and largest UAW membership of the Detroit Three. That means bonuses, lump-sum payments, and raises could cost Ford more than it would GM. 

"Our focus is reaching a fair agreement with the UAW that allows the company to be more competitive so we can continue to preserve and protect good-paying manufacturing jobs and maintain our track record of investing in our U.S. plants," Felker said.

The last contract was negotiated in 2015 during periods of growth. Four years later, potential plant closures, expensive bets on future technology, and an uncertain regulatory and trade environment make for a tougher negotiating environment. All three Detroit automakers have since the last contract continually reported record earnings.

But the automakers all wanted contracts that could curb spending over the next several years in anticipation of a downturn. UAW members have been looking for a piece of the fat profits all three Detroit automakers have reported annually since the last contract was negotiated. The UAW held firm with GM on issues like health care costs, wage increases and temporary employees. 

Meantime, GM won the ability to close three plants in the U.S., potentially saving billions in the years to come. Neither Ford nor Fiat Chrysler appear to have any plants they want to close — Fiat Chrysler is building a new Jeep plant in Detroit — and experts say that makes it unclear where either automaker could "win" anything when it's their turn to negotiate.

Twitter: @Ian_Thibodeau

Staff Writer Breana Noble contributed