Members of the union at Ford Motor Company have overwhelmingly rejected the contract changes, which would have resulted in a wage freeze for newly recruited workers for six years from the time of joining and could have given the company more flexibility to transfer workers around.
The move also would have successfully restrained the union from going on strike for better pay or perks until 2015.
Voting over, outcome clear
The United Auto Workers (UAW) union, which has 41,000 workers from Ford, had given local unions until Monday to complete voting. But the voting process is almost over now, according to an unnamed source at Ford.
Though exact tallies are not available, Ford could manage only 28 percent of the workers’ votes with 72 percent turning down the move. At least 12 local unions, representing about 27,750 workers have voted against the deal, whereas only 7000 workers from 4 local unions have favored the motion.
Though some local unions are still voting through Sunday, the outcome is already clear and the Ford leaders have conceded that the intended contract changes are defeated. Ron Gettelfinger, the President of the UAW, told reporters Friday that he did not see any need for a re-vote.
This could have been the third round of concessions in the past two years. To ratify the motion, Ford had offered each worker a $1000 bonus falling due in March. Additionally, the company had assured to create or preserve a total of about 7000 jobs.
Many workers are yet to see the benefits coming from the last deal, known as the March deal, before agreeing to ratify another deal. David Baran, a maintenance worker at the Rouge complex for 30 years, is unmoved by Ford’s plea to cut costs. He is of the opinion that the company is doing well.
Ford better placed than other Detroit giants, still wants cost cut
Unlike the other two auto giants – Chrysler and General Motors, Ford has neither filed for bankruptcy nor sought bail out help from the Federal Government. Yet it wanted to retain a competitive edge by following similar cost cutting methods that the union workers of the two Detroit automakers have supported. Usually, pay and other contract provisions of the three auto majors are on par with one another.
Currently, Ford’s market position looks healthier than its rivals, though it is still in heavy debts. It posted a $2.3 billion profit in the second quarter of 2009. As per the available sales figures of the company, at least two Wall Street analysts predict that the third quarter earnings are likely to be profitable too.
Workers at Ford didn’t think that the company is in a weak position to warrant a cost reduction measure now. They felt that they are being asked to sacrifice more when the company’s executives are not showing such interest. The CEO of Ford, Allan Mulally, received a total of $17.7 million last year.
Some experts feel that the situation is paradoxical and the creator of the situation is the company itself. Harley Shaiken, a labor expert at the University of California, opines, “It’s a hard sell in this environment. You’ve got the Ford paradox, where they are hailing how successful they are in the marketing, and that’s obviously paying off for them, but they’re asking more from their workers”.
And the workers have balked.
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