U.S. Markets closed

UAW workers ratify Ford contract securing $9K signing bonus, pay raises, new product

Phoebe Wall Howard, Detroit Free Press

After two weeks of voting with little drama or controversy, UAW workers ratified their four-year contract with Ford by 56.3% of the vote, the UAW announced Friday evening.

The union announced the percentage without specific numbers after members finished casting votes nationally at 7:30 p.m.

“Every Ford employee and temporary employee will be at the top-rate for full-time status at the end of this four-year agreement,” said acting UAW President Rory Gamble, who is Director of the UAW-Ford Department, in a prepared statement. “This is a life changing contract for many and provides a template for all future Ford UAW members to a full-time, top-rate status. There will be no more permanent temporary situations and no more permanent tiers.”

He added, "Ford’s commitment to job security and assembly in the United States is a model for American manufacturers.”

Workers check Ford F-150 trucks being built at the Ford Rouge Plant in Dearborn on Thursday, September 27, 2018.

Ford has more UAW members than any other automaker in the U.S. An estimated 55,000 workers are covered by the deal.

“We are pleased that we were able to reach an agreement quickly with the UAW without a costly disruption to production,” said Joe Hinrichs, Ford’s president, Automotive, said in a prepared statement. “This deal helps Ford enhance our competitiveness and protect good-paying manufacturing jobs. Working with the UAW, we have added flexibility to our operations while keeping labor costs in line with projected U.S. manufacturing labor inflation costs and still rewarded our workers for their important contributions to the company.”

On Monday, the UAW begins the process to finish its pattern bargaining with Fiat Chrysler. A six-week strike at General Motors that ended with an Oct. 25 ratification has pushed the contract negotiations through Thanksgiving, which is atypical.

The 2019 UAW contract with Ford includes $6 billion in promised “major product investments” in U.S. facilities and the creation and retention of more than 8,500 jobs, with 19 facilities promised investments. 

The contract also includes no changes to workers' share of health care costs, a $9,000 ratification bonus for seniority employees and $3,500 for temporary workers.

Top secret: Ford accidentally leaks Mustang Mach-E details prematurely

Buying a new car? These are the 10 most (and least) reliable cars of 2020, according to Consumer Reports

Cars have a problem: They last longer, and that means the insides get grubby and outmoded

Bernie Ricke, president of UAW Local 600 near the Rouge factory complex, said his 14,000 active members are looking to the future, investment, products and jobs. "The process went well," he said Friday. "I think we did a good job of explaining the agreement to our members. I'm proud of the job we did."

Mike Rinaldi, then-President of UAW Local 600, stands at the sign in front of his headquarters on Dix and points to the Ford Rouge Plant in 1983.

'Smart' negotiators

Fact is, Ford negotiators met many of the goals outlined by the UAW, said Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research in Ann Arbor, Michig. "They wanted in-progression workers to reach parity, and they do. Temporary workers got a pathway to full employment and there's a cap on the number of temporary workers hired. They don't lose anything on health care. And they got a whole bunch of detailed investment."

Companies generally want contracts ratified by 50% plus 1 vote because that shows each side gave up what was needed, she said Friday.

Investment to build a new Mustang at Ford's Flat Rock assembly plant is part of the company's contract with the UAW.

Harley Shaiken, a professor at the University of California at Berkeley who specializes in labor affairs and tracks UAW activity closely, said Friday, "Ratification at Ford isn’t a surprise. It reflects a lot of hard work. There is a solid relationship between the company and the UAW — with experienced, smart negotiators on both sides."

Beyond health care, plant investments and the ratification bonus, here are some of the contract highlights:

  • Wage increases of 3% in the second and fourth years; 4% lump sums calculated on base pay given in alternate years.
  • Current temporary workers get a path to permanent employment with the potential to reach the top wage rate during the life of the contract. 
  • Profit-sharing formula is maintained.
  • A $1,000 pension contribution to the Tax-Efficient Savings Plan for hourly employees for those hired or rehired before Nov. 19, 2007, or in a skilled classification prior to Oct. 24, 2011. 
  • $60,000 retirement incentive for production workers and up to 200 skilled trades.
  • Skilled trades get two $1,000 lump sums in 2019 and 2021.
  • Assistance packages for retirement-eligible Romeo employees.
  • A moratorium on outsourcing and plant closures.
  • A commitment to a Flat Rock viability strategy for new product. The plant south of Detroit is slated for a $250 million investment.
  • Buffalo Stamping will get a $60 million investment, but stampings for the F-150 and Super Duty will be transferred. The contract summary highlights note a commitment to the plant and "securing future opportunities to the plant."
  • So-called in-progression workers hired after 2007 get a faster path to top pay. Under the previous contract, those workers started at $17 an hour, would reach $28 an hour after eight years. Under the proposal, that is shortened to four years.

Ford noted in a news release Friday that the company "will incur $700 million in expense in its fourth quarter tied to the new agreement, primarily associated with the ratification bonus." The agreement covers UAW-represented hourly employees in Ford manufacturing facilities in Michigan, Ohio, Kentucky, Missouri, Illinois and New York.

The terms of the new agreement provide Ford with opportunities to improve its manufacturing and operational fitness, the company said, including:

  • Increased use of temporary employees.
  • Closing the Romeo Engine Plant in metro Detroit, improving powertrain manufacturing capacity utilization, while offering all workers jobs at a nearby plant.
  • Special retirement program that will improve workforce composition, lowering labor cost.
  • No increase to pension obligations or payments to retirees.

Follow Detroit Free Press reporter Phoebe Wall Howard on Twitter @phoebesaid.

This article originally appeared on Detroit Free Press: UAW Ford workers ratify contract with signing bonus, raises, product