UAW-Ford deal follows wage, health care pattern set by GM
The United Auto Workers' tentative agreement with Ford Motor Co. closely follows the pattern set by General Motors Co. in wage increases, lump-sum bonuses, maintained health care benefits and pathways for temporary and in-progression employees to earn top wages.
UAW local leaders on Friday voted to send the agreement to its 55,000-plus members for a ratification vote. Voting will begin Monday, with ballots due Nov. 15.
The UAW touted "significant gains," including a $6 billion in investment to Ford's U.S. facilities, including at Flat Rock Assembly Plant and the Buffalo Stamping Plant in New York. The contract would save or create 8,500 jobs.
It also includes a moratorium on outsourcing and plant closures through the life of the four-year contract. The one exception is the closure of the Romeo Engine Plant. The 600 hourly employees who work there would be offered jobs at the Van Dyke Transmission Plant roughly 15 miles away.
“UAW Ford members have created an environment for growth in products and jobs, and a serious commitment by Ford Motor Company to grow their footprint right here in the U.S.,” UAW President Gary Jones said in a statement. “This contract continues a strong pattern that gives all workers a path to traditional wages and maintains the job security and benefits our members deserve.”
The deal, like the GM contract, includes 3% wage increases in the second and fourth years and 4% lump-sum bonuses in the first and third years for eligible permanent employees, according to a UAW summary of the deal.
Permanent employees would receive $9,000 ratification bonuses — less than the $11,000 sum to GM employees who were on strike for six weeks, but more than the $8,500 Ford employees received in 2015. Ford's temporary employees would receive a $3,500 signing bonus; that compares to the $4,500 going to GM workers in the latest contract, and the $2,000 Ford workers got in 2015.
"The Ford agreement appears to match the GM pattern for the most part with the exception of the ratification bonus — $9,000 seems more than reasonable, given that the Ford members did not have to endure a six-week strike," said Colin Lightbody, a former Fiat Chrysler Automobiles NV labor negotiator and president of HR and Labor Guru Inc.
UAW members would not pay additional costs for health care under the Ford deal. Ford employees currently pay 3% on average of total health care compared to the 28% paid by an average American household. There will be no change to Ford's profit-sharing formula; in 2015, the company removed its $12,000 cap on the $1 per $1 million in pre-tax earnings made in North America over a 2% margin.
The company would contribute $1,000 toward the pension plans of production employees hired before Nov. 19, 2007, and skilled trades employees hired prior to Oct. 24, 2011. Skilled trades employees also would receive $1,000 lump-sum payments in 2019 and 2021 for use toward tooling.
Like the GM deal, a $60,000 retirement incentive is being offered for all production employees and up to 200 skilled trade workers who retire under the normal and early-retirement provisions of the agreement.
"We are proud that UAW-Ford members through this contract will continue to be the largest U.S. auto workforce and build the most products here at home,” Rory Gamble, UAW vice president, said in a statement. “This contract reflects the hard work, sacrifice and quality work of UAW members as they lead the U.S. auto industry.”
Chris Budnick, an employee at Ford's Kentucky Truck Plant in Louisville, wants to look over the details of the agreement more before making a decision. But he was pleased to see the health care coverage was maintained. He's concerned about how temporary employees will make it to full-time employment.
"I want to see parity," he said. "I am very concerned about the temps."
Under the proposed contract, on Jan. 6, 2020, all temporary employees with three or more years experience will receive full-time status. If a temporary reaches three years with the company in 2020 they will be promoted to full time. If a temporary employee reaches two years or more in 2021 they will be converted to full-time status.
In the proposed agreement, the UAW-Ford bargaining team was able to put a cap of 8% on the amount of temporary employees Ford hires company-wide and 10% at any given facility, unless otherwise approved by the national parties.
There is no cap on the number of temporary employees in the GM contract. However, GM must have approval of the union to supplement the workforce with temps.
While Ford's contract is "similar to GM," said Kristin Dziczek, vice president of industry, labor and economics at Ann Arbor's Center for Automotive Research. It's also "proof that pattern bargaining is not cookie-cutter."