November 1, 2009
Ford’s Plan to Cut Costs Falls Short in Union Vote in US
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DEARBORN, Mich. — Union workers at the Ford Motor Company have refused to help the company make more cuts to its labor costs.
Changes to the workers’ contract that would have allowed the cuts appeared headed for certain defeat Saturday after about 72 percent of workers voted to reject the deal, according to a tally compiled by The New York Times from results at separate plants.
Ford needed 9,000 more votes for passage, with fewer than 7,000 votes outstanding to be either cast or counted through Sunday.
Ford, which said it needed the changes to reduce some advantages the union gave to General Motors and Chrysler as those companies headed into bankruptcy in the spring, is not expected to seek a new deal.
The Ford proposal, which was supported by the union’s leadership, would have frozen the pay of newly hired workers and banned the union from striking in order to demand higher pay or benefits until 2015. Some job classifications also would have been combined, giving Ford more flexibility to shuffle workers around.
In return, Ford promised to pay each worker a $1,000 bonus in March 2010 and to guarantee the assignment of new products to some plants, creating or saving a total of about 7,000 jobs, according to calculations by union leaders.
A person with knowledge of the private negotiations said Ford had already achieved most of the savings it needed in a deal the union approved in the spring. Ford said that earlier deal would save it about $500 million a year. The changes proposed in the latest vote would have saved far less.
A Ford spokesman, Mark Truby, said the company would not comment until the union released official results. That is expected by Monday, when Ford also plans to report its third-quarter earnings. Ford posted a $2.3 billion profit in the second quarter, although it remains deeply in debt.
The president of the United Auto Workers union, Ron Gettelfinger, told reporters Friday that he did not plan to seek a revote.
The workers’ refusal to accept what would have been a third round of concessions since 2007 shows that, despite their industry’s troubles, there is a limit to how much they are willing to sacrifice, said Harley Shaiken, a labor expert at the University of California, Berkeley.
“It’s a hard sell in this environment,” he said. “You’ve got the Ford paradox, where they are hailing how successful they are in the marketing, and that’s obviously paying off for them, but they’re asking more from their workers.”
Many workers interviewed before the vote said they had yet to see benefits they were promised in the March deal even as they were being asked to change their contract again.
The deal’s failure means Ford retains the right to contract some work to other companies or to plants in other countries with lower labor costs.
That worries Marvin Shine, a union official at the U.A.W. Local 600, which represents workers at Ford’s sprawling Rouge manufacturing complex in Dearborn, Mich. About 93 percent of workers at the pickup truck assembly plant there voted against the deal, based on the early results.
“A lot of people are voting it down, and I can’t understand why because there’s no giveaways in it,” Mr. Shine said. “It’s a shame that there’s a possibility we could lose these jobs for no reason.”
But Dave Baran, who has a maintenance job at the Rouge complex, said he was unmoved by Ford’s argument that it needed to follow the lead of its domestic rivals, even though Ford was the only Detroit carmaker to avoid bankruptcy and a federal rescue.
“The company’s doing good,” said Mr. Baran, a 30-year employee at Ford. “Why do we have to be on the same plateau as Chrysler and G.M.? We’re different now.”
LINK:
http://www.nytimes.com/2009/11/01/business/01auto.html
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