Ford and UAW reach tentative contract agreement

Union calls deal 'one of the richest agreements in the history of UAW-Ford'

Terms of the Ford-UAW deal were not immediately available, but are expected to closely resemble the GM contract.
UPDATED: 11/6/15 10:30 pm ET - adds GM vote

DETROIT -- Ford Motor Co. and the UAW today said they have reached a tentative agreement on a new contract described by the union as one of the richest ever between the two parties.

UAW officials did not immediately release any details about the Ford deal, but it is expected to closely resemble a tentative General Motors contract that includes raises for veteran workers currently earning about $28 an hour and a path to full wages for Tier 2 workers, who currently earn less than $20 an hour.

In a tally announced late Friday, the UAW said a majority of voting GM workers had approved their contract, but because skilled-trades workers turned it down, the deal would not be considered ratified. Union leaders will meet with skilled-trade members in coming days to determine the reasons for the rejection before deciding their next step.

Along with the raises for hourly workers and better health-care plans for entry-level staffers, Ford’s UAW members will get $10,000 -- $8,500 for ratification plus a $1,500 advance on profit-sharing payouts -- if they accept the deal, people familiar with the terms told Bloomberg on Friday.

GM workers got an $8,000 ratification bonus, double what senior Fiat Chrysler Automobiles workers got.

Reuters, meanwhile, cited sources saying Ford has pledged $9 billion in new U.S. investments  in if the deal is ratified. 

In a Facebook post, the UAW said the Ford deal contains “big gains and job security protections” for workers.

“This agreement is significant for our members in that it creates a clear path for economic advancement for active members and rewards veteran employees for their sacrifices in recent years,” UAW Vice President Jimmy Settles said in a statement. “It is one of the richest agreements in the history of UAW-Ford.”

Changes in cap

The tentative agreement also eliminates a limit on Ford that said that once the company had 28 percent of its workers at the entry-level pay and benefits scale, it had to convert the most senior members to top-level pay.

Since entry-level workers can now work toward the top pay structure, the union was able to give up the cap, Bloomberg reported. Ford executives have complained that the company was subject to that clause while the other two had been exempted since their bankruptcies.

Ford’s average labor cost, including benefits, is about $57 an hour, or $10 more than at the U.S. operations of Fiat Chrysler or Toyota Motor Corp. and $2 more than at GM, according to the Center for Automotive Research in Ann Arbor, Mich.

In a Facebook post, the UAW said the deal contains “big gains and job security protections” for workers.

Union meeting

Leaders of the UAW locals that represent Ford workers will meet in Detroit on Monday to vote on sending the proposal to rank-and-file members for approval.

“The agreement, if ratified, will help lead the Ford Motor Company, our employees and our communities into the future,” John Fleming, Ford’s executive vice president for global manufacturing and labor affairs, said in a statement.

The pact comes about seven weeks after the UAW’s deals with the Detroit 3 automakers expired. The union reached a tentative agreement with Fiat Chrysler first, but workers sent the parties back to the bargaining table by voting it down. The deal it later reached with GM rewards workers more generously than the FCA contract.

“I know this has been a very long and stressful process, but I thank each of the 52,000 hard working men and women of UAW-Ford for their patience, understanding and solidarity,” the UAW told Ford workers in a statement attributed to President Dennis Williams and Vice President Jimmy Settles.

Ford reported a record North American quarterly profit of $2.7 billion last week. However, executives have said sizable increases in its labor costs would make the company less competitive.

Among the issues the UAW was working to settle with Ford is what the automaker will build at its Michigan Assembly Plant in Wayne, Mich. Ford said this summer that it would stop building the Focus and C-Max small cars there in 2018, with sources saying the vehicles are likely headed to Mexico instead.

Bloomberg contributed to this report.

You can reach Nick Bunkley at nbunkley@crain.com -- Follow Nick on Twitter: @nickbunkley

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