Next hurdle for Ford, UAW will be selling contract proposal
Tuesday, 6 November 2007
DETROIT, Nov 5 (Internet): Over the next few weeks, Ford Motor and the United Automobile Workers union each are faced with the challenge of selling their tentative contract as the best they could get in light of Ford's decline.
Industry analysts said Ford would need to assure Wall Street that it is not backtracking on its revamping plan as it tries to secure the labor peace that eluded General Motors and Chrysler.
Meanwhile, the union must win support from Ford's 54,000 members made wary by the job cuts that immediately after the approval of new contracts at the other Detroit auto companies.
Hanging over both the company and the union is the likelihood that conditions in the American auto industry will only get worse over the coming year as a result of the housing slump, record oil prices and general economic uncertainty.
"People are just feeling stuck with whatever we can get," said Clark Griffin, who has worked on the assembly line at Ford's plant in Dearborn, Mich., for seven years. "If you turn it down, then what's going to happen?"
The tentative agreement, reached early Saturday, came without a strike. By contrast, GM workers walked off the job for two days in late September and Chrysler workers struck for about six hours last month before the union reached new contracts that have since been approved.
Union leaders at Ford plants around the country are set to meet in Dearborn Monday afternoon to review the agreement. If they approve it, the contract will go to workers for ratification, a process expected to take about two weeks.
The Ford contract closely follows the terms of those agreements. Its major feature is a health care trust, called a Voluntary Employee Benefit Association, or VEBA, that will take responsibility for health care benefits for current and future retirees and their families.
Ford shares rose Friday in anticipation of a deal. But several Wall Street analysts have said the company needs to accelerate its cost-cutting efforts. "Investors will be very skeptical of any changes" to Ford's revamping plan, said John A. Casesa, an industry analyst with the Casesa Shapiro Group.
Ford lost $12.6 billion last year. Analysts expect a third-quarter loss of nearly $1 billion when Ford reports its results Thursday.
Under the plan, called the Way Forward, Ford said it would close 16 factories and eliminate 44,000 salaried and hourly jobs by 2012. But it has only named 10 of the 16 plants. At least two of the remaining six apparently were spared under the new contract, which will expire in 2011, local union officials and industry analysts said Sunday.
One is Ford's plant in Avon Lake, Ohio, where Ford builds the Econoline van. City officials had said the plant's future rested on the outcome of the talks.
"We're looking forward to a long future for our plant," said Tim Donovan, president of UAW Local 2000, which represents workers in Avon Lake. A Ford spokeswoman declined to comment Sunday.
But Ford, like GM and Chrysler, retained the ability to eliminate shifts and temporarily idle its factories if its sales fall. Its rivals swiftly exercised that option.
Industry analysts said Ford would need to assure Wall Street that it is not backtracking on its revamping plan as it tries to secure the labor peace that eluded General Motors and Chrysler.
Meanwhile, the union must win support from Ford's 54,000 members made wary by the job cuts that immediately after the approval of new contracts at the other Detroit auto companies.
Hanging over both the company and the union is the likelihood that conditions in the American auto industry will only get worse over the coming year as a result of the housing slump, record oil prices and general economic uncertainty.
"People are just feeling stuck with whatever we can get," said Clark Griffin, who has worked on the assembly line at Ford's plant in Dearborn, Mich., for seven years. "If you turn it down, then what's going to happen?"
The tentative agreement, reached early Saturday, came without a strike. By contrast, GM workers walked off the job for two days in late September and Chrysler workers struck for about six hours last month before the union reached new contracts that have since been approved.
Union leaders at Ford plants around the country are set to meet in Dearborn Monday afternoon to review the agreement. If they approve it, the contract will go to workers for ratification, a process expected to take about two weeks.
The Ford contract closely follows the terms of those agreements. Its major feature is a health care trust, called a Voluntary Employee Benefit Association, or VEBA, that will take responsibility for health care benefits for current and future retirees and their families.
Ford shares rose Friday in anticipation of a deal. But several Wall Street analysts have said the company needs to accelerate its cost-cutting efforts. "Investors will be very skeptical of any changes" to Ford's revamping plan, said John A. Casesa, an industry analyst with the Casesa Shapiro Group.
Ford lost $12.6 billion last year. Analysts expect a third-quarter loss of nearly $1 billion when Ford reports its results Thursday.
Under the plan, called the Way Forward, Ford said it would close 16 factories and eliminate 44,000 salaried and hourly jobs by 2012. But it has only named 10 of the 16 plants. At least two of the remaining six apparently were spared under the new contract, which will expire in 2011, local union officials and industry analysts said Sunday.
One is Ford's plant in Avon Lake, Ohio, where Ford builds the Econoline van. City officials had said the plant's future rested on the outcome of the talks.
"We're looking forward to a long future for our plant," said Tim Donovan, president of UAW Local 2000, which represents workers in Avon Lake. A Ford spokeswoman declined to comment Sunday.
But Ford, like GM and Chrysler, retained the ability to eliminate shifts and temporarily idle its factories if its sales fall. Its rivals swiftly exercised that option.