DETROIT — Ford Motor Co. and the UAW said they reached a tentative agreement late Wednesday on a new four-year labor pact that covers the automaker's roughly 55,000 hourly unionized employees.
The proposed deal includes more than $6 billion in investment and would create or retain more than 8,500 jobs, the UAW said. An engine plant in suburban Detroit would close, sources told Automotive News, but no layoffs are expected as a result.
The deal would also provide full-time workers with a $9,000 ratification bonus, while temporary workers would get $3,500, according to two people with knowledge of the deal.
Health care benefits would remain unchanged, and Ford workers would receive similar wage and lump sum bonuses that were bargained in GM’s contract, the people said. GM workers are to receive two 3 percent raises and two 4 percent lump-sum bonuses over the course of the deal.
CNBC first reported the ratification bonus and wage increases.
Union leaders from Ford plants around the U.S. will meet on Friday in Detroit to review the deal, according to a union spokesman. They will decide whether to recommend it to the membership for ratification.
"Our national negotiators elected by their local unions have voted unanimously to recommend to the UAW-Ford National Council the proposed tentative agreement," UAW-Ford Vice President Rory Gamble said in a statement. "Our negotiating team worked diligently during the General Motors strike to maintain productive negotiations with Ford. The pattern bargaining strategy has been a very effective approach for UAW and its members to secure economic gains around salary, benefits and secured over $6 billion in major product investments in American facilities, creating and retaining over 8,500 jobs for our communities."
The UAW's main-table negotiations with Ford wrapped up after just three days, compared to its contentious back-and-forth with GM during a 40-day national strike that sapped $3 billion from the company's profits. The talks were marked by public comments from both sides accusing the other of stalling and playing games.
Ford executives have long touted the automaker’s strong relationship with the UAW. During the handshake ceremony to officially kick off talks in July, Executive Chairman Bill Ford thanked the union, vowing to “never forget” what it did to help the automaker avoid bankruptcy during the Great Recession.
The tentative deal’s jobs number matches what the union won in its 2015 contract with Ford, but the investment called for this year is is $3 billion less.
Ford's Romeo Engine plant in Michigan will close if the tentative deal is ratified, according to two people with knowledge of the proposed pact. The closure would result in no job losses, however, as the plant's roughly 600 workers would be transferred to nearby Van Dyke Transmission, the people said. It's the only facility slated to close as part of the deal.
Romeo supplies engines for the Mustang Shelby GT350 and GT500, among others, while the Van Dyke plant supplies transmissions for the F-150, Navigator, Expedition, Mustang, Transit and other vehicles.
The Detroit News and Detroit Free Press both reported the plant closure earlier Thursday
Overall, Ford’s deal is likely to mirror the pact between the UAW and GM due to the union’s pattern bargaining approach.
Ford is in the midst of a new product blitz, adding nameplates and redesigning roughly 75 percent of its lineup by the end of next year. But the union’s chances to win new product in the U.S. could be slim; Ford already builds more than 80 percent of its vehicles in the U.S., according to LMC Automotive.
The automaker entered negotiations determined to lower its health care costs, saying it would top $1 billion annually for the first time next year. GM, however, did not bargain for any health care concessions, making it more difficult for Ford and FCA to reign in costs.
