On the evening of October 30th, Ford Motor Co. and the United Auto Workers agreed on a new interim labor contract, averting a strike by Ford’s 55,000 union members. It is understood that the new interim labor contract agreement includes $6 billion in new investment for Ford and the creation or retention of 8,500 jobs, and Ford has formally confirmed the terms of both agreements.
In addition, the agreement bears many similarities to recent terms signed by unions and GM, including an annual increase of 3 percent or a one-time 4 percent bonus, a 3 percent retention grant for medical out-of-pocket costs and a rise in temporary workers to regular jobs. There is no further information on the more detailed agreement.
The interim agreement may have to wait at least one to two weeks before it can be approved or rejected by the union. It still needs approval from local union leaders, and the union will meet in Detroit on Friday to vote on the deal.
If union leaders approve the deal, it will have to be voted on by nearly 55,000 union workers for Ford. If union members reject the deal, negotiators will return to the negotiating table. And it could be accompanied by a Ford strike.
Ford was able to reach an agreement with the union so quickly that it made huge concessions. Subject to the global car market downturn, the major car companies are shrinking the product front. In the negotiations, Ford will invest an additional $6 billion in concessions to the union, averting a GM strike crisis.
Gm is reported to have lost more than $2 billion in more than 40 days of GM strikes. That’s why Ford is trying to avoid a strike. Would rather increase the cost of manpower than suffer the greater cost of the strike.
This time, with Ford’s agreement with the union. The union will turn its attention to Fiat Chrysler, the last carmaker to negotiate with Detroit in 2019. Relations between the union and Fiat Chrysler are expected to be more strained as it reaches a merger agreement with France’s Peugeot Citroen. By then, the future of the new company will be even more uncertain.