There's confusion over the 12,000 jobs King claimed. Actually only 3,400 are new hires.
Ford UAW members voted to accept the tentative agreement between the struggling union and Ford management two weeks ago. The results of voting were 63% in favor of the agreement (22,031) to 37% voting against (12,957) among production workers, according to a UAW statement issued today. Higher paid UAW skilled trades workers voted 65% in favor (4,243) to 35% voting against (2,268). Ford has 9,000 skilled trades workers and is offering buyouts to decrease their numbers by 1,000. The formal UAW Ford contract signing is next Monday.
In a conference call with analysts on Thursday morning, Ford said it was considering resuming the payment of dividends before its commercial ratings rose from junk to investment grade, a clear departure from the previous position.
The agreement covering approximately 42,000 Ford employees – 2,000 of whom are in old Visteon plants – is the second one ratified with the domestic automakers talks following an earlier UAW GM agreement. In both cases, the line was held on labor costs, which means that Ford and GM have labor costs competitive with non-unionized transplants in the union-hostile Southern U.S.
In Ford’s case, the contract increases labor costs by less than 1% annually, offset by changes in labor practices, which increase the profitability of the plants. The UAW Chrysler tentative agreement – essentially the same, with lower signing bonuses – is still being voted on.
“I am pleased with the strong support for this agreement from UAW Ford members. I believe UAW Ford workers understood the importance of each and every vote,” said UAW Vice President Jimmy Settles, who directs the union’s Ford Department. “That was evident in the high voter turnout with 85% of the overall membership voting.”
The Ford UAW agreement is based of Ford’s promise to add new jobs and invest what’s said to be $16 billion to produce new models and revised vehicles and components by 2015, of which, $6.3 billion will be invested directly into retooling plants.
Ten years ago there were more than 102,000 UAW jobs at Ford. Today there are 40,000, and Ford will place the ACH workers – aka Visteon – in Ford jobs. As is the current management practice in the ailing U.S. economy, the jobs claim includes so called retained jobs, as well as some new ones. Of the 12,000 jobs claimed under the contract by the UAW only 3,400 are actually new hires.
The majority of new jobs will be entry level, which means following the GM pattern, new hires will start at $14.78 and hour going to $19.28 over four years, not the $28 or more an hour that experienced union workers earn.
Ford management clearly succeeded in improving its overall competitiveness in the U.S. Ford’s total average hourly cost per hour worked before the new deal was $58.12 and it will go up only slightly. Under the contact entry level workers will be more than 8% of the total workforce.
On pensions there are no benefit changes to the Ford UAW pension plan. All new
hires will have a defined contribution plan. About 20% of Ford-UAW workers are retirement eligible, and the median age of workers is 46.
Actually little new product was added in the U.S. Auto Alliance International in Flat Rock, Mich., Michigan Assembly Plant in Wayne, Mich., Chicago Assembly Plant and Louisville Assembly Plant each will add a new production shift, resulting in volume increases.
Ford is moving production of the Ford F-650 and F-750 medium-duty trucks from Escobedo, Mexico, to its Ohio Assembly Plant in Avon Lake, Ohio, after the plant stops current production of the Ford E-Series vans. The company also is bringing F53 motor home chassis and F59 commercial stripped chassis production in-house, investing $128 million in the Ohio facility.
The medium truck manufacturing shift will make Ford the only U.S. full-line manufacturer of Class 6 and 7 medium-duty vehicles. It also marks the end of a decade-old Blue Diamond Truck LLC joint venture between Ford and Navistar International, which currently manufactures Ford F-650 and F-750 trucks in Mexico for customers across North America.
Production of Ford’s E-Series, currently built at Ohio Assembly Plant, will continue to be available in some variations through most of the decade. A new full-size van called the Transit – slated for production beginning in 2013 at Ford’s Kansas City Assembly Plant in Kansas City, Mo. – also will be introduced for Ford’s commercial van customers in North America.
