The United Auto Workers union ratified a landmark contract with Ford Motor Co. aimed at boosting Ford's competitiveness against foreign rivals, the company and the union announced Nov. 14.
Ford was the last of Detroit's Big Three to seal a deal which will help narrow a labor cost gap of about $30 an hour with the non-unionized U.S. plants of foreign automakers.
Unlike General Motors and Chrysler LLC, which were hit with brief nationwide strikes after talks stalled and then saw the contract pass with a narrow margin during ratification, Ford's tentative agreement was welcomed by workers, who voted 79% in favor of the contract.
Key to the three contracts was a deal to transfer the administration of retiree health care costs to the union. The union also agreed to establish a two-tiered wage system in which some new workers would get significantly lower wages and reduced benefits.
Both Ford and GM made job security guarantees in exchange for the UAW concessions. Chrysler did not issue any such guarantees and announced plans to cut up to 12,000 more jobs shortly after its contract was ratified.
Ford's promise to halt the closure of six plants and to impose a "moratorium" on further closures helped ease the ratification process. "We obtained solid commitments from the company to keep plants open and to invest in UAW members and union-made products here in the U.S.," said UAW Vice President Bob King, who heads the union's National Ford Department.
The new contract covers approximately 54,000 active workers at Ford and more than 122,000 Ford retirees and surviving spouses. It will expire September 14, 2011.
Copyright Agence France-Presse, 2007
