Ford UAW Workes Authorize Strike As Contract Deadline Rapidly Approaches

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With the September 14 deadline looming on the horizon, Ford auto workers are busy hammering out the details on a new labor agreement with the auto manufacturing giant. Despite the fact that Ford managed to retain a greater percentage of manufacturing workers over the last 3 years than cross-town rivals GM and Chrysler-Fiat, Ford’s UAW workers are angry and feel that they should receive some benefit from the company’s profitability over the last two years.

According to news reports, Ford’s UAW workers believe that their hard work and sacrifice were key to enabling Ford to avoid bankruptcy during the economic crisis of the last few years. While there is definitely some truth in this viewpoint, shrewd management and financial leveraging coupled with good fiscal practices were also large factors in Ford’s ability to survive the sharp economic downturn without government assistance.

Put another way, the fact that Ford has carefully managed labor costs helped them survive…workers get credit for doing good work, but financial responsibility was a major factor too. Yet, here we are a few days away from a deadline and the word “strike” has been uttered. What gives?

Ford Workers Authorize Strike

Despite Ford’s security, stability, and growth during trying times (read 2007 thru today), Ford workers at a number of key plants recently voted to authorize UAW leadership to strike if they are not able to come to an acceptable new agreement with Ford.

At this point, it should be noted that Ford is the only auto manufacturer of the so-called “Big Three” automakers were union workers still retain the ability to strike. General Motors and Chrysler-Fiat UAW workers are unable to strike due to no-strike clauses in their bankruptcy restructuring agreements, and the no strike rule means that GM and Chrysler workers won’t be able to effectively strike until 2015.

Informally, this is called the “Ford didn’t need a federal bailout penalty.” If Ford had asked the U.S. taxpayers for financial assistance, they might not be staring down a possible UAW strike right now.

Yet, to take the other side of this argument for just a moment, Ford’s UAW workers are understandably frustrated that they have not received a cost of living increase or pay raise since 2007. They feel that this is unfair, especially since salaried workers received benefit and salary increases in 2010…not to mention Ford CEO Alan Mullaly’s recent $65 million bonus.

Entry-level wages are also a point of contention. New workers receive between $14 – $16 an hour with senior workers making around $28 an hour as was agreed in a 2007 two-tiered pay structure negotiated by the UAW. This was done in an effort to lower labor costs and make Ford, who was struggling financially at the time, competitive with foreign and non-union shops. Now that Ford is more competitive, newer workers under the lower wage scale want to see their wages increased to match the wages paid to senior workers who were lucky enough to be hired prior to 2007.

Finally, it should be clear that even though there is widespread dissatisfaction among the workers, not all are in favor of the strike. Rumors are that many workers see a strike as potentially endangering jobs and Ford’s ability to stay competitive, so it seems that at least some of Ford’s UAW members understand a strike hurts at least as much as it helps.

Still, why authorize the strike this early in the negotiations? Ford’s workers can likely extract pay raises and a new profit sharing plan without resorting to threats, and if for some reason Ford management wasn’t willing to bargain, the UAW could have had a strike authorization in a matter of hours. The UAW jumped the gun, in my opinion, by getting authorization for a strike last week.

While the likelihood of a strike is low, there are many UAW workers who just don’t care about the why and how of the global auto industry. All they know is that Ford’s salaried workers and senior execs have made a lot of money lately, and that Ford’s corporate profits have been strong. They don’t care about Ford’s remaining $26 billion in debt, the way that the auto industry’s winners and losers can change rapidly, or the fact that nearly 10% of America is unemployed.

All these workers seem to care about is using a strike as leverage to “get theirs,” and based on the fact that strike authorization was approved quickly and easily, it seems like these workers have a strong voice inside the UAW.

If they do indeed strike, it will be a sad day for Ford, and perhaps even a sad day for America.

Filed Under: Auto News


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  1. Mike says:

    Two very interesting sides are raised in your article. I have to agree that the workers seem to have an argument for raises. If you can pay your CEO a $65 million BONUS, than you should be able to throw a couple extra bucks at the people that actually are making the vehicles.

  2. Brian J says:

    I agree that Ford executives should not be getting the huge pay bonuses they are receiving. Clearly hard work should have benefits in management (that’s called capitalism), but rewards should also be given to those who actually mold the concept into manufactured reality. Trickle the pay increases down the ladder so that everyone gets a little piece of the pie. Ford can stay in business if the suits don’t work for a few weeks, but sales come to a grinding halt when the blue collar stops working.

    Ford, take care of your workers and make pay rises fair.

    UAW, stop trying to overuse the strike as a means to strongarm management.

    Toyota, keep taking care of your employees so as to keep the UAW out.

    Toyota workers, keep voting the life-sucking UAW out of Toyota facilities.

    Toyota Trucks: Proudly manufactured by non-union employees!

  3. Mickey says:

    Well Jason being a former union person, you would want a contract on the date your old contract ends. Both Ford and UAW have to start earlier when negotiating these contracts. Both like waiting till the end to make it dramatic. If the company has done great the last 4 years they should give these people a pay raise. Everything has gone up. Ford needs to get caught up in the cost of living. Who am I to say if they want to strike then, by all means strike. It won’r effect me directly but indirectly it will hurt all of us.

  4. mk says:

    Let them strike, don’t care to me. Yah, it is not fair that workers only get paid 16 bucks starting pay vs. someone doing same job been there say 10 years longer making almost double pay. Life if not fair, get over it. Yah, I complain when I work my butt off at work for 11 bucks per hour been there past 6 years and another lady in same office worked there 18 years probably making 13 bucks per hour and she gabs on the phone 1-2 hours each night not working. Some things we cannot change and if don’t like it, quit and move on to another job if you can find one, good luck with unemployment here around 10%. If ford employees do not like their job vs. what they get paid, I’ll glady take 16 per hour since I don’t see me making that ever around here. Bunch of painsy-_ss whiners!

  5. CN says:

    This was one of the main killers of the American auto industry. It’s easy to want to compare with the salaried workers but, if they want the same, get a better education and get yourself the salaried jobs. No one is guaranteed to earn the same amount of money. Alan Mullaly gets paid the big bucks because he is a genius at what he does and deserves it. He turned Boeing around and made it profitable again and now he is doing the same for Ford. if it wasn’t for him, Ford would have ended up in bankruptcy and those same UAW people calling for a strike would be part of the unemployed landscape in America. Our problem in this country is we do not know how to be content and be truly thankful for what we have. Yes the cost of living is going up but guess what, I don’t know of any company that has been giving cost of living increases including federal government jobs. And they wonder why Toyota and Honda will only build plants in right to work states. The UAW needs to be done away with if you ask me. I worked for UPS before and got tired of the Teamsters taking my money from every paycheck and not providing me much more representation (coverage) that I could not get through the labor laws. So I got myself a management job and finished college. Now, I get home with enough energy to play with my kids and don’t feel like I’m beating my body to death for someone else. Even though I’m a Toyota owner, I actually like seeing the improvement in Ford quality and their success. I’d hate to see the UAW screw that up.

  6. Mickey says:

    CN the govt does give cost of living raises but those were froze for another two more years.

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