Ford Workers Agree to New Labor Deal

By Nora Naughton 

The United Auto Workers union said Friday they have secured a new labor deal at Ford Motor Co., after unionized workers at the company's U.S. factories voted to back the agreement.

About 56% of Ford's UAW members cast ballots supporting the new four-year agreement, the union said. The deal largely mirrors one struck at General Motors Co. last month, following a 40-day nationwide strike that crippled the auto maker's U.S. manufacturing operations.

The ratification gives union leaders momentum as they try to complete contract talks in Detroit, turning to Fiat Chrysler Automobiles NV next -- the last of the U.S. car companies to reach a new labor accord with the UAW.

The new contract provides a clearer path to full wages for all employees, acting UAW President Rory Gamble said. President of Ford's automotive business, Joe Hinrichs, said the deal will increase the auto maker's competitiveness and manufacturing flexibility.

The now-ratified contract at Ford, covering 56,000 UAW-represented factory workers, includes wage increases, a cap on the use of temporary employees and $6 billion in new U.S. factory investment to add or retain 8,500 jobs. Full-time workers will also get a $9,000 signing bonus.

In exchange, Ford can move ahead with closing an engine plant in Michigan that employs 600 workers, a move that will help it lower manufacturing costs, analysts say. The union said the closure won't result in job loss because the affected workers will have the option of transferring to a nearby plant.

Ford entered into contract talks this summer looking to tamp down fast-rising health-care costs, which are on track to top $1 billion next year, say people familiar with Ford's bargaining strategy. But the company ultimately agreed to no changes in the employee health-care contributions, which are now set at 3%, a far lower rate than the average paid by other private-sector workers.

"It's the same deal as GM, and they did it without a strike," said Art Schwartz, a consultant and former bargainer for GM.

The UAW has sought to use the deal struck at GM as a template for reaching similar agreements with Ford and Fiat Chrysler, as is typical in pattern bargaining.

The contract agreement reached at GM, the U.S.'s largest car maker by sales, set a high bar for its Detroit rivals, with analysts projecting it will add to their long-term labor costs.

Ford already spends an average of $61 an hour on labor for its UAW workforce, a figure that has grown over the past four years, according to the Center for Automotive Research.

Any additional costs from this contract come as the company is trying to restructure its global business to prepare for an expected car-market downturn. Ford, last month, lowered its full-year profit forecast, citing new cost pressures and a weaker fourth quarter.

(END) Dow Jones Newswires

November 15, 2019 20:43 ET (01:43 GMT)

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