Report: Ford, UAW agree on labor concessions

From Bloomberg News
Claycomo productionFord Motor Co., seeking concessions granted to U.S. rivals, reached a tentative United Auto Workers accord that includes a six-year ban on some strikes and a wage freeze for new hires, two people familiar with the matter said.

UAW leaders will present the plan Oct. 13 in Detroit to the Ford National Council, which consists of factory-level union chiefs, said the people, who asked not to be identified because the terms aren’t public.

Ford offered pledges for new production and a $1,000 bonus tied to quality goals, the people said.

Ford's Claycomo plant builds the F-150 truck and the Escape mid-size SUV.

New savings would help Ford build on a $500 million cut in labor costs under a UAW agreement in March, while the sweeteners are aimed at damping resistance to fresh concessions. General Motors Co. and Chrysler Group LLC won union givebacks to help them with their U.S.-backed bankruptcies.

“There’s a lot of sentiment against concessions inside the plant,” said Gary Walkowicz, a union official at a Ford truck factory in Dearborn, Mich., who isn’t directly involved in the national contract talks.
Ford, the only U.S. automaker to avoid bankruptcy, is seeking parity in labor expenses with GM and Chrysler, which received UAW approval for a six-year pay freeze for entry-level employees, a no-strike accord until 2015 and fewer union job classifications.

The March accord with the UAW calls for Dearborn-based Ford’s 41,000 U.S. hourly workers to cede annual bonuses and cost-of-living increases and accept reduced layoff benefits.

Ford declined to comment today on whether an accord had been reached on new concessions. “We don’t have an announcement to make,” said Marcey Evans, a spokeswoman. “We continue to work with the union and we are making progress.”

A UAW spokesman, Roger Kerson, didn’t immediately respond to a phone call and e-mail requesting comment.

Strikes over wages and benefits would be prohibited for six years under the new agreement, while walkouts over issues such as plant safety would still be permitted, the people said. The plan doesn’t include cuts to retiree benefits, such as vision coverage, that were granted to GM and Chrysler, the people said. The $1,000 bonus payment will be made to Ford workers in March based on meeting 2009 product-quality targets, one person said.

In exchange, Ford is promising to put new work into two plants in Sterling Heights, Michigan, that make transmissions, axles and steel body panels for cars, the people said.