UAW and Ford Announce Tentative Agreement

09/17/96

Reuters reported that the United Auto Workers union and Ford Motor Company have reached a tentative agreement for a new contract. The two sides engaged in marathon bargaining sessions over the weekend and on Monday, moving slowly toward agreement. Both parties declined to detail the agreement at a press conference, although the union said that it would present the agreement to its Ford council on Wednesday, and that it expects its membership to ratify the deal on September 29.

The old contract expired over the weekend, although it is not unusual for bargaining sessions for a new contract to continue after the old one expires. The UAW's contract with Ford details the rights and obligations of 105,000 hourly workers.

Key issues on the table during this year's contract negotiations included lengthening the term of the contract; outsourcing, which is the use of outside suppliers for parts; and the length of time it takes a new-hire to attain a normal wage. Ford pursued a longer contract term because it would allow the automaker to stabilize its costs over a longer period and would minimize the risk of strike for over the added time. The UAW has pursued restrictions against outsourcing, which takes work away from employees that have supported the company with their labor. The union was seeking the right to strike over outsourcing decisions it did not agree with. The previous collective bargaining agreement between the union and Ford had new hires starting at 70% of what veterans earn and catching up in three years; automakers want to increase the amount of time they can pay workers at a lower rate.

Traditionally the first agreement reached serves as a pattern agreement for bargaining with the other two companies, and analysts expect the UAW to take its new agreement to Chrysler next. Once the union has signed a tentative agreement with Chrysler, too, it will proceed to GM. Reaching agreement with GM is expected to be the most difficult task of this bargaining session, although having the other two pacts signed should help.

Paul Dever -- The Auto Channel