UAW turns to deal with Ford challenge

updated 7:51 a.m. ET Oct. 29, 2007

DETROIT - The United Auto Workers union already has seen two strikes and significant dissent in this year’s round of contract talks, but the fight could be just beginning as the union turns to its last bargaining partner, Ford Motor Co.

Most analysts agree Ford is in dire financial straits and needs more help from the UAW than General Motors Corp. and Chrysler LLC. The No. 2 U.S. automaker lost more than $12 billion last year and has mortgaged its assets to fund its turnaround plan. That plan calls for the closure of 16 plants by 2012.

But the union needs to convince its members that it’s getting the best agreement possible or it will be unable to get members to ratify the agreement. Members may be looking for the kinds of job security agreements GM granted in its contract, which promises new products for 16 of its U.S. assembly plants.

Chrysler didn’t make such extensive promises and its contract passed by a narrower margin. Ford isn’t in a position to guarantee future jobs, either, said Erich Merkle, vice president of auto industry forecasting for the consulting firm IRN Inc. Ford’s U.S. market share has been steadily dropping, from 26 percent in the early 1990s to about 15 percent this year, and it’s using less than 80 percent of its U.S. plant capacity.

“Ford has to close plants. I don’t know how Ford can provide a lot of security going forward in terms of jobs,” Merkle said. “That made it difficult at Chrysler to get the contract passed, but if you think it’s a problem for Chrysler, it’s even a bigger problem for Ford.”

Chrysler workers ratified their contract in voting that ended early Saturday. The UAW said 56 percent of production workers and 51 percent of skilled trades workers voted in favor of the pact. The percentages voting in favor were much higher among clerical workers and engineers represented by the union.

The union reached the agreement with Chrysler on Oct. 10 following a six-hour nationwide strike. Like an agreement ratified earlier by GM workers, the Chrysler contract establishes a union-run trust to cover retirees’ health care and allows the company to pay lower wages of $14 an hour to about 11,000 noncore, non-assembly workers. Chrysler assembly workers now make a starting wage of $28.75 per hour.

The new contract covers about 45,000 active workers at Chrysler and more than 55,000 Chrysler retirees and 23,000 surviving spouses. It will expire on Sept. 14, 2011.

“We are pleased that our UAW employees recognize that the new agreement meets the needs of the company and its employees by providing a framework to improve our long-term manufacturing competitiveness,” Tom LaSorda, Chrysler’s vice chairman and president, said in a statement. LaSorda was the company’s chief negotiator.

At GM, 66 percent of workers ratified the deal. But at Chrysler, many workers were angered by the contract because it made fewer promises than GM’s. Some workers also were upset about the two-tier wage structure.

“I just don’t like the idea ... that a guy working next to me may have to settle for a less wage,” said Jeffery Cole, 48, of Rockford, who has worked 13 years for Chrysler, the last two in Belvidere, Ill., as a quality inspector.

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