UAW workers approve Ford labor deal

By Ben Klayman

United Auto Workers

Ford Motor


Ford hourly workers voted by a nearly 2-to-1 margin to approve the four-year deal, clearing the way for the creation of almost 6,000 jobs and investment of more than $6 billion in the automaker's U.S. plants and also boosting its chances for a credit rating update that would reduce borrowing costs.

"The American auto industry is on its way back," UAW President Bob King said in a statement.

The proposed contract had been in jeopardy as late as the end of last week when early returns had shown a slight majority of those voting against ratification, but intense lobbying by UAW leaders who warned a better deal was not to be had in the weak economy helped turn the tide.

Sixty-three percent of Ford workers casting ballots voted to ratify the deal, but UAW leaders acknowledged the high level of frustration among many of the 41,000 members.

"Working people in this country are clearly frustrated about the inequity in our society," said Jimmy Settles, UAW vice president in charge of Ford relations. "Our members at Ford are frustrated with the economy, the lack of wage increases over the years, outrageous executive compensation and the immorality of Wall Street."

The deal gives Ford workers at least $16,000 in bonuses over the term of the contract, including a $6,000 signing bonus. That is more generous than the $11,500 minimum General Motors Co workers will receive over the life of their new deal.

Many veteran Ford production workers were unhappy with the lack of a raise since 2003 in their base wage even as Ford Chief Executive Alan Mulally's 2010 compensation package totaled $26.5 million.

Another sore point: Many Ford workers had hoped the contract would resolve a grievance over pay that salaried employees received, but hourly workers did not. An arbitrator is expected to decide on the issue in mid-November.

Workers at several Ford plants had voiced fear about the prospect of a strike if the contract failed to pass. Ford was the only U.S. automaker whose UAW members retained the right to strike if a deal could not be reached.


Ford executives, who will host a conference call on Thursday morning to explain the deal's financial impact, touted the pact on Wednesday.

"Our agreement is fair to our employees and it improves our competitiveness in the U.S.," Mark Fields, Ford's president of the Americas, said in a separate statement.

Ford shares were up 3 cents at $11.81 near midday on Wednesday.

Analysts have said the proposed deal with Ford and the contract at GM would cap costs and link the pay of blue-collar workers more directly with performance.

"I'm glad to see they got it done because we didn't need a strike," said Jefferies analyst Peter Nesvold, who has a "buy" rating on Ford shares. "It does set the stage for a potential credit upgrade and a dividend, potentially in the next 30 to 60 days."

Ratification of the Ford deal leaves Chrysler Group LLC, majority owned by Italian automaker Fiat SpA, as the last of the Detroit automakers with a labor deal to ratify.

UAW workers at Chrysler, the weakest financially of the Detroit automakers, are voting on their tentative pact through October 26. They are guaranteed much less, including a signing bonus of $1,750.

UAW workers at GM ratified their deal in late September.

Completing deals with the U.S. automakers would allow UAW leaders to turn their focus to trying to organize workers at the U.S. plants of foreign automakers, something King has called vital to the union's survival.

Under the approved deal, Ford will add production capacity and work shifts at four plants: Michigan Assembly near Detroit; Chicago Assembly; Louisville Assembly in Kentucky and the Auto Alliance plant in Flat Rock, Michigan.

Three of the plants will get 1,200 more workers, and the Louisville plant will add 1,300 workers.

Michigan Assembly makes the Ford Focus small sedan that saw sales rise 41 percent in September from a year ago. Ford said Focus sales have been hemmed in by lack of supply that it said the added production will address.

The Chicago Assembly Plant makes the Explorer SUV, which has seen sales more than double from a year ago.

(Additional reporting by Bernie Woodall in New York, editing by Dave Zimmerman and Matthew Lewis)