Details: New UAW/FoMoCo Agreement; Jobs Bank Curtailed!

[nadepalma]

There have been a lot of posts on GMI on Ford/UAW agreement, but nothing that I've seen that gives nearly all details. Sorry if this is a re-post of sorts, but didn't see all this info before.

This is the run through on the plan; I'm very pleased FoMoCo got some of the concessions they wanted and I'm thrilled that Wall Street approves.

However, they made a significant gain in the "Jobs Bank" area -- which I hope will become a model for GM and Chrysler moving forward. That program needs to end/be amended and I'm glad Ford made significant headway here.

It is in GM, FoMoCo and Chrysler best interest to see their cross-town rivals stay healthy and viable. Ford's gain very well may be GM or Chrysler's gain in the future --- just as GM's push for a VEBA style program set the tone for the other 2 automakres (which ultimately was founded on Goodyear's experiences).

More details on the plan below:

Originally Posted by Detroit News

SOURCE: Detroit News

Monday, November 5, 2007
UAW-FORD AGREEMENT
Ailing Ford gets deal that fits its needs
UAW agrees to less cash for retiree health care fund in exchange for plant investments
Bryce G. Hoffman and Daniel Howes / The Detroit News

The tentative agreement between Ford Motor Co. and the United Auto Workers departs in significant ways from the union's deals with General Motors Corp. and Chrysler LLC, positioning Ford to close the cost gap with foreign rivals and make the Blue Oval competitive again.

The deal -- reached early Saturday after a week of marathon negotiations that included face-to-face bargaining between CEO Alan Mulally and union President Ron Gettelfinger -- appears to be the sort of transformational contract that Mulally promised and Wall Street demanded.

In exchange for increased investment in new cars, trucks and Ford's manufacturing operations, according to a source familiar with the negotiations, Ford would fund an independent trust for retiree health care with $6.9 billion in cash, a smaller percentage of cash than GM or Chrysler are putting into similar trusts.

For Ford, that represents roughly 40 percent of the $17.3 billion the automaker agreed to pay toward its total $23-billion retiree health care obligation, with the remainder financed by convertible notes. GM, by contrast, paid roughly 54 percent of its obligation in cash.

In a novel twist proposed by Gettelfinger and quickly embraced by Mulally, Ford will invest the cash it would have paid into the trust, known as a voluntary employees' beneficiary association, or VEBA, in its U.S. assembly plants. Factories that do not already have flexible body shops will get them, making Ford a far more nimble manufacturer than it is today. The cash also will be used to upgrade equipment in older facilities.

The trade-off appears to be a win for factory-level UAW locals worried that Ford would close as many as six more factories across North America, including two assembly plants. It also reinforces a mantra Gettelfinger repeated during the talks, according to a source familiar with the situation: "If Ford is stronger, that will make our membership more secure."

Additionally, unlike the GM and Chrysler deals, Ford's contract does not define hourly jobs as "core" assembly line jobs and "non-core" manufacturing jobs, such as materials handling, to justify permanently lower wages for new hires. Ford and the UAW agreed that 20 percent of the automaker's hourly work force would be second-tier workers -- meaning, effectively, that virtually all new hires, no matter what their job, would be paid the lower wage-and-benefit package until the 20 percent cap is reached.

Current hourly workers would not be directly affected by the two-tier wage plan. The change would ease pressure sooner on Ford's payroll, conserving cash for other uses, and allow the automaker to keep open U.S. assembly plants targeted for closure under Ford's "Way Forward" restructuring plan, though some U.S. parts plants likely will be shuttered.

In another departure from the GM pattern, bargainers also agreed to stiffer rules for the UAW-Ford "jobs bank," called "GEN," which essentially pays idled workers not to work. Should the contract be ratified, workers would be limited to one year in the jobs bank and be given one opportunity to take a new job.

"This is exactly what Ford needed," Wall Street analyst Bradley Rubin of BNP Paribas said Sunday of the deal. "This will allow them to focus on product. Ford is now much more competitive than GM or Chrysler."

Ford declined to comment Sunday. The tentative agreement still must be approved by rank-and-file UAW members, which is more than a mere formality. It required intense lobbying from senior UAW officials, including Gettelfinger, before Chrysler workers narrowly approved their contract.

The UAW has summoned the presidents of UAW locals representing Ford factories across the country to a meeting in Dearborn today, where the union leaders will outline the terms of the agreement and set a schedule for rank-and-file voting.

Ford is eager to see the ratification process begin before Thursday, when it will release third-quarter earnings, which are expected to be better than previously anticipated. Though the improvement is largely the result of Ford's successes overseas, the automaker is worried that any upbeat earnings news could undermine the perception among U.S. workers that concessions like those in the new agreement are vital to Ford's future.

The concessions Ford made on plant closings will go a long way toward selling the agreement to UAW members, said Harley Shaiken, a professor of labor studies at the University of California, Berkeley, who has advised the union in the past. "The ability to keep plants open is a major victory for the union. The strongest contract terms in the world don't mean much if plants continue to close."

While Ford plans more worker buyouts, a company source said the automaker does not intend to surprise the union with unexpected job cuts as Chrysler did after its UAW deal was ratified.

Ford's restructuring plan had called for closing 16 factories in North America by 2012. Of those, 10 had already been named. But the six remaining facilities had not been publicly identified.

As The Detroit News first reported last month, Ford told the UAW it would take U.S. assembly plants off that list in exchange for the kind of cash-saving concessions it won on key issues like the VEBA and two-tier wages.

Specifically, Ford has removed the Wayne Stamping and Assembly Plant and the Ohio Assembly Plant in Avon Lake, Ohio, from its list of factories targeted for closure. The automaker also will keep open its Chicago Assembly Plant and Michigan Truck Plant in Wayne, which were rumored to be on the bubble.

Moreover, Ford made new product commitments to some of those factories, including Wayne Stamping and Assembly, which builds the Ford Focus, as part of the tentative agreement. The Wayne and Chicago plants were seen as problems because they were the only two of Ford's 33 factories where the union refused to negotiate new cost-saving competitive operating agreements prior to the national contract talks.

Both factories will get new operating agreements as part of the deal reached Saturday. Such agreements, which cover work rules, job classifications and other items, are already saving Ford $800 million a year.

MORE HERE

[skylark68]

Sounds like good news for both sides actually. I'm glad things worked out for the most part for Ford.

[dratnol]

Glad to see that some progress was made on the jobs bank.

Why didn't the UAW strike Ford too, the token strike for the others was a joke.

[Perian]

The contract (and the new Lincoln) look really good for Ford.

Looks like Ron saved his old plant!

[camaro_freak]

bravo to Ford and the UAW for working this out without going on strike, which we all know does nothing but hurt everyone.

[tgagneguam]

I hope GM will be able to bargain for similar concessions during the next contract negotiations. Granted, Ford and GM are [clearly] different companies, but some of the details of this contract sound more beneficial for Ford than what GM was able to wrestle from the UAW with its contract.

It also reinforces a mantra Gettelfinger repeated during the talks, according to a source familiar with the situation: "If Ford is stronger, that will make our membership more secure."

Replace "Ford" with "Detroit," and you've got yourself an insightful, useful, productive mantra, Ron. Your long-term perspective will serve the UAW members in the long-run, even if they may not appreciate it today.

[mike's 01ws6]

Originally Posted by tgagneguam

I hope GM will be able to bargain for similar concessions during the next contract negotiations. Granted, Ford and GM are [clearly] different companies, but some of the details of this contract sound more beneficial for Ford than what GM was able to wrestle from the UAW with its contract.



Replace "Ford" with "Detroit," and you've got yourself an insightful, useful, productive mantra, Ron. Your long-term perspective will serve the UAW members in the long-run, even if they may not appreciate it today.

Do you even know what was in the GM contract besides the little BS sheet that was circulated on the internet?