UAW labor talk focus shifts to Ford

Reuters News
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Posted: Sep 22, 2011 9:08 AM
UAW labor talk focus shifts to Ford

DETROIT (Reuters) - The United Auto Workers union has shifted its focus to Ford Motor Co on Thursday in an attempt to reach a new labor contract with the only U.S. automaker that avoided bankruptcy.

The more intensive negotiations will begin on Thursday morning, a day after the UAW failed to finalize a deal with Chrysler, extending its deadline with the Fiat -controlled automaker until October 19.

The Detroit labor talks will set wages and benefits for about 112,500 unionized autoworkers and set a benchmark for wages at auto-parts suppliers and nonunion plants run by Asian and German automakers. A tentative deal for a new four-year contract was reached last week with General Motors Co.

New four-year contracts for GM and Chrysler workers would be the first since those two companies were bailed out by the Obama administration in 2009. UAW-represented autoworkers have gone without a base pay increase since 2003.

The talks with Ford, playing out at its Dearborn, Michigan, headquarters also known as "the Glass House," will be patterned roughly after the GM deal, which is expected to be ratified late next week.

The GM contract would keep or create more than 6,000 factory jobs, raise wages for entry-level workers and guarantee all workers bonuses of at least $11,500 over four years.

The uncertainty around the outlook for auto sales in 2012 and the risk of a renewed U.S. recession have made the Detroit automakers reluctant to offer traditional wage increases.

However, Ford's roughly 41,000 UAW-represented workers have retained the right to strike and have the highest expectations for wages and bonuses because of the automaker's performance. Ford has not suffered a UAW strike since 1976.

The talks with Ford are also complicated by an unsettled contract grievance.

The union has said the company broke a pledge to treat workers equally when it restored raises and 401(k) matches for white-collar workers without making a similar payout to factory workers.

There is also simmering resentment among UAW workers at Ford over Chief Executive Alan Mulally's compensation last year of $26.5 million, which UAW President Bob King called "morally wrong."

The UAW also may seek to have Ford shift work from Mexico to U.S. plants, something it touted in its deal with GM. Ford builds the Fusion mid-sized and Fiesta small cars in Mexico. Ford also has an engine plant in Mexico.

Jimmy Settles, the union official leading negotiations with Ford, told workers in an email on Wednesday that the bargaining team had "already been working hard" to reach an agreement with Ford on details of a proposed contract.

Ford said in a Wednesday statement that it looked forward to reaching a deal fair to all sides that allowed the company to be more competitive.

The shift caught analysts and even some UAW officials by surprise as the union strategy had been to close quick deals at GM and Chrysler before turning to Ford. However, talks with Chrysler became strained last week when the company's CEO, Sergio Marchionne, scolded King for failing to meet a commitment to reach a new contract by the expiration of the former pact on September 14.

In talks this week, Chrysler negotiators had hammered home the message that the GM deal was too rich for Chrysler to match, a person with knowledge of the talks previously said.

In addition, Chrysler pressed the UAW for some assurance that it would not try to push fixed costs higher even after 2015, beyond the scope of the contract being negotiated, the person said. That unusual demand could have caused the talks to stall.

(Reporting by Ben Klayman in Detroit; Editing by Maureen Bavdek)