Ford & the UAW

[Gerry Clinchy]

NY Times today
http://www.nytimes.com/2009/10/28/bu...html?th&emc=th

It does not seem reasonable to me that the unions would not give Ford the same deal they gave GM & Chrysler.

What good does it accomplish to put Ford at a disadvantage with companies that ran themselves into bankruptcy?

This is an opportunity for American workers, and unions to prove that they can produce world-class autos here and not have their jobs sent overseas.

[paul young]

really? it does not seem reasonable that someone would not want their wages frozen for 6 years?-Paul

[Gerry Clinchy]

include a six-year wage freeze for newly hired workers, some job-classification changes and a provision that bars the union from striking over demands for better pay and benefits through 2015.

The wage freeze applies to new hires, but the article mentions nothing about wages for current employees. Basically, a whole lot of people would be quite happy with a wage freeze v. no wages or compulsory furloughs.

My thought would be to tie wage increases into company profitability, so that it is in everyone's interest to see the company profit. Maybe a bonus program based on company profit, so that if a bad quarter occurs, there is no ongoing wage increase to deal with (making the bad quarter even "badder").

Ford ... says it needs the modifications to remain competitive with General Motors and Chrysler, whose workers agreed to similar deals in the spring.

Since the union and the taxpayers really are the "ownership" of the other two, wouldn't it be contrary to competitiveness for the union to not be consistent in its demands? Self-interest of the union with its stake in GM & Chrysler? Doesn't it essentially penalize Ford for better management? (although Ford's "profit" also came from financing adjustments).

Ford reported a $2.3 billion profit in the second quarter, largely because of a debt restructuring effort. An analyst said recently that the company could report another profit next week, though most observers on Wall Street are expecting a modest loss for Ford in the third quarter.

So if Ford is planning ahead (God bless 'em), the union workers are more likely to keep their jobs by working with them. OTOH, maybe the union just wants a piece of Ford as it got a piece of GM & Chrysler?



Keeping in mind that the UAW is exempt from the proposed health care overall.

[zeus3925]

The wage freeze applies to new hires, but the article mentions nothing about wages for current employees. Basically, a whole lot of people would be quite happy with a wage freeze v. no wages or compulsory furloughs.

My thought would be to tie wage increases into company profitability, so that it is in everyone's interest to see the company profit. Maybe a bonus program based on company profit, so that if a bad quarter occurs, there is no ongoing wage increase to deal with (making the bad quarter even "badder").



Since the union and the taxpayers really are the "ownership" of the other two, wouldn't it be contrary to competitiveness for the union to not be consistent in its demands? Self-interest of the union with its stake in GM & Chrysler? Doesn't it essentially penalize Ford for better management? (although Ford's "profit" also came from financing adjustments).



So if Ford is planning ahead (God bless 'em), the union workers are more likely to keep their jobs by working with them. OTOH, maybe the union just wants a piece of Ford as it got a piece of GM & Chrysler?



Keeping in mind that the UAW is exempt from the proposed health care overall.

Gerry, Ford workers do have a bonus plan based on profitability.

The UAW is composed of dues paying, voting members. As such the membership does not always go along with the recommendations of the leadership. Often members will vote contrarily to the leadership.

I don't think that equivalent ownership in Ford is even in the calculus. GM and Chrysler had contractual pension obligations they could not meet. The union pension fund owns the shares in those companies. The UAW does not participate in the day to day management of those companies.

Both the UAW and have advocated for health care reform at least since Iaccoca was running Chrysler. The management of all the domestic auto companies met with George W. Bush early in bush's first termand pleaded with him to do something about health care. Bush's response was essentially, "What, me worry?"

[Gerry Clinchy]

Gerry, Ford workers do have a bonus plan based on profitability.

Guess they don't think it's enough.

The UAW is composed of dues paying, voting members. As such the membership does not always go along with the recommendations of the leadership. Often members will vote contrarily to the leadership.

I don't think that equivalent ownership in Ford is even in the calculus.

I was implying that if they drove Ford to bankruptcy as well, the union (or pension fund) would own part of them as well.

GM and Chrysler had contractual pension obligations they could not meet. The union pension fund owns the shares in those companies. The UAW does not participate in the day to day management of those companies.

I was equating the pension fund ownership to union ownership. Not exactly the same, but still a reason why the union workers would want GM and Chrysler to do well ... their retirement depends on it. So, I see a conflict of interest in not giving Ford the same wage package as they give to GM & C; i.e. so that Ford would end up at a disadvantage in costs of production.

Both the UAW and have advocated for health care reform at least since Iaccoca was running Chrysler. The management of all the domestic auto companies met with George W. Bush early in bush's first termand pleaded with him to do something about health care. Bush's response was essentially, "What, me worry?"

Strange, then, that the unions wanted to make sure they didn't have to partake of the proposals that are in the legislature now? Seems inconsistent. However, Congress seems to have made such a mess of what they're doing, that even the UAW has figured that out.

[zeus3925]

Gerry, as you well know, if you are going to trust decision making to a democratic process, it is going to be messy at times. You will note in the link below that rejection of the settlement with Ford runs counter to the UAW leadership's position for concessions to Ford. Ratification of the agreement is having tough going in some locals and is passing well in some others. A union this divided is not likely to be the company devouring juggernaut you envision.

http://freep.com/article/20091028/BU...-Ford-contract

[Gerry Clinchy]

Gerry, as you well know, if you are going to trust decision making to a democratic process, it is going to be messy at times.

LOL! We all know so well how messy it can get ... look at our Congress, our State legislatures, our local governments! The democratic process at work! Sorry, Zeus, I couldn't resist that one.

You will note in the link below that rejection of the settlement with Ford runs counter to the UAW leadership's position for concessions to Ford. Ratification of the agreement is having some tough going in some locals and is pasing well in some others.

The NY Times article only mentioned the large local that rejected it 92%, so I'm glad to hear that some of the workers are using a logical approach rather than pure emotion.

I would be easy for the workers to assume that since Ford has been surviving on its own, and "we're told" that the recession is on its way out, that it would be back to business as usual.

And, yes, the Times also made mention that the union leadership was acting pragmatically on the offer. That is also a sign of hope.

A union this devided is not likely to be a company devouring juggernaut that you envision.

I don't think it's necessarily a conscious thing ... but it may have occurred to some of the voting workers that the govt is standing by to help. They'd probably be wiser to wait and see how govt intervention in the other two automakers works out before jumping from the frying pan into the fire.

This thought, that a divided group loses power that a unified group would have ... that might also apply to what we are seeing in our govt. The Ds in Congress might have actually accomplished something if they paid attention to what their constituencies tell them.
http://freep.com/article/20091028/BU...-Ford-contract

[zeus3925]

Here you go, Gerry--Fresh of the pages of the Detroit Free Press

http://freep.com/article/20091031/BU...-Ford-contract

[Gerry Clinchy]

UAW President Ron Gettelfinger told the Free Press on Friday that the deal "still has a chance of being ratified." But if it fails, he said, "There would be no reason" to reopen negotiations. The current contract expires in 2011. "We are not going to give up," Gettelfinger said.


Although a failure to ratify might be viewed as an embarrassing blow, experts told the Free Press that the deal doesn't matter much in the short term for Ford because the automaker and the union already reached a deal on a contract earlier this year that saves $500 million annually.


The only clear financial consequence from a contract rejection will be to workers. By not giving workers the $1,000 bonus promised, Ford will save $41 million.

I guess the real outcome will be evident when the present contract expires in 2011. If the economy has improved, then Ford might offer a new proposal based on increased sales. If the economy is still weak at that time, the workers might feel more "friendly" to what Ford is offering. OTOH, if the economy is still weak, Ford might then offer less than they are offering now.

Guess we'll have to wait until 2011.