Bloomberg News

UAW Says Vote on Ford Pact Flips to Approval From Rejection

October 15, 2011

(Updates voting results in first paragraph.)

Oct. 15 (Bloomberg) -- Ford Motor Co. hourly workers have voted 56 percent in favor of a tentative four-year labor agreement, according to results released today by the United Auto Workers.

The tally has seesawed since yesterday. The day started with 53 percent voting against and ended with 54 percent in favor. The union’s Ford division said on its Facebook page as of 10 a.m. New York time that 8,577 members had cast votes for the accord while 6,710 had voted against it.

The post didn’t specify the percentage of Ford’s 40,600 U.S. hourly workers who have had the chance to cast a ballot. Voting is set to conclude Oct. 18.

UAW President Bob King said Oct. 12 that he expected members to ratify the agreement reached with Ford on Oct. 4. The Dearborn, Michigan-based company pledged 12,000 new jobs, $6.2 billion in factory upgrades, and bonus and profit-sharing payments this year that total as much as $10,000 per worker. It won’t give raises for senior workers or restore cost-of-living pay increases workers gave up to help Ford survive.

“The fact the vote is this contentious suggests at worst that the contract is not overly generous to the UAW and at best is a good deal for Ford,” Adam Jonas, an analyst with Morgan Stanley, wrote in an Oct. 13 research note suggesting investors buy Ford on UAW uncertainty.

“UAW leadership is anxious to ratify the current contract as a rejection could open the door to a less attractive deal thanks to a deteriorating economy,” wrote Jonas, who rates Ford “overweight.”

Ford Optimistic

“We remain optimistic that the tentative agreement will be approved,” Karen Hampton, a spokeswoman for Ford, said in an e- mail yesterday. “The agreement is fair to our employees and improves Ford’s competitiveness in the U.S.”

UAW Local 600, Ford’s largest union local representing workers at its vast Rouge complex in Dearborn, concluded voting yesterday. The UAW didn’t specify whether the results released today included Local 600’s vote. While it is King’s home local, it went against the union president’s recommendation two years ago and voted down concessions such as a ban on strikes until 2015.

That Local 600 vote helped defeat the proposals, meaning only Ford faced a strike possibility in this year’s labor talks. The UAW agreed to a strike ban at General Motors Co. and Fiat SpA-controlled Chrysler Group LLC as part of their U.S.-backed bankruptcies.

‘No’ Votes

“People feel they deserve more,” Gary Walkowicz, a UAW Local 600 union official who is leading a “Vote No” campaign, said yesterday. “There is a lot of anger out here.”

Workers at a Ford metal-stamping plant in Chicago this week rejected the contract with 70 percent of the vote, according to results posted on the website of UAW Local 588. At a company- owned parts plant in Saline, Michigan, 59 percent of production workers Oct. 13 voted to turn down the contract, while 51 percent of skilled-trades employees rejected it, according to UAW Local 892’s website.

The proposed agreement also has been rejected by Ford’s Chicago assembly plant, which builds the Taurus sedan and Explorer sport-utility vehicle, and a factory in Wayne, Michigan, that produces the Focus small car.

Agreement Approvals

Members at Ford’s Mustang factory in Flat Rock, Michigan, voted 72 percent in favor of the agreement, with 1,190 workers for it and 318 against, according to a post on UAW Local 3000’s website. The factory is to get a second shift to produce the Fusion midsize sedan under the new contract.

Workers at Ford’s engine plant in Brook Park, Ohio, two days ago approved the agreement with 57 percent of the vote, according to UAW Local 1250 President Mike Gammella. The factory, which employs 943 people, is gaining a third shift of workers as part of the new contract.

“This is a very good contract in a very poor economy,” Gammella. “People understand that.”

Votes are to be conducted this weekend at big assembly plants in Avon Lake, Ohio, and Claycomo, Missouri. The ratification vote will conclude Oct. 18 when Ford’s Kentucky truck plant and Louisville assembly plant complete two days of voting. The factories produce pickups and SUVs.

Ford’s ‘Riches’

Ford earned $9.28 billion in the past two calendar years after $30.1 billion in losses from 2006 through 2008. Chief Executive Officer Alan Mulally’s 2010 compensation rose 48 percent to $26.5 million. Ford also awarded him more than $56 million in stock in March for leading the company’s turnaround.

Ford borrowed $23.4 billion in late 2006, putting up all major assets including its blue oval logo as collateral. That helped Ford avoid the bankruptcies and bailouts that befell the predecessors of GM and Chrysler.

Workers at GM last month approved a new contract with the automaker. Chrysler reached a tentative labor deal with the union Oct. 12 that, like the Ford agreement, is subject to a ratification vote by UAW members.

“Ford has had an embarrassment of riches, so their workers expected a major improvement over the GM agreement,” said Gary Chaison, a professor of industrial relations at Clark University in Worcester, Massachusetts. “They know they can go on strike and they feel Ford is vulnerable.”

--Editors: Bill Koenig, Sylvia Wier

To contact the reporter on this story: Keith Naughton in Detroit at knaughton3@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net


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