UAW Agrees to Givebacks at Ford

The United Auto Workers and Ford reached a tentative agreement February 24 on concessions. The Obama administration had demanded concessions from workers at GM and Chrysler as part of a “viability plan” the companies must present in exchange for government bailout loans, but the UAW negotiated first at Ford, which has not received loans. Tentative agreements at GM and Chrysler, still to come, will follow this template.


Download the full Ford-UAW tentative agreement here
(Clicking link will start a download of a Zipped file.)

Any contract changes must be ratified by rank-and-file members.

Workers are asked to:

  • receive half the company’s payments into the retiree health care fund (VEBA) in Ford stock, now trading around $2 a share. While the UAW said it had achieved compromises that won’t risk the fund, contract opponents noted that the level of payments agreed to in the 2007 contract already dangerously underfund the plan. Retirees could be left with drastically reduced or no health care coverage, as happened to many Steelworker retirees.
  • take a pay cut of about $1/hour by giving up the cost-of-living allowance. Although the formula was imperfect and the union had agreed to many “diversions” (subtractions) from COLA over the years, the COLA clause was designed to keep wages from falling behind inflation.
  • give up two lump-sum bonuses. These bonuses were negotiated in fall 2007 in lieu of wage increases. The four-year 2007 agreement included a wage freeze for the life of the contract, which will continue. Entry-level employees will lose all bonuses.
  • receive time-and-a-half pay only for work beyond 40 hours in a week, rather than work beyond 8 hours in a day.
  • reduce break times from 48 to 40 minutes each 8-hour shift. Ten-hour shifts will include 50 minute breaks.
  • work under “Alternative Work Schedules” if local management demands. This will probably mean four 10-hour days at straight time.
  • reduce Supplemental Unemployment Benefits (SUB) pay. A special fund at each company had topped up laid-off workers’ pay. The funds are not bottomless and have run dry in the past. Unknown at this point is whether company contributions will be cut or eliminated. Under the proposal, those with more than 20 years of service may still collect SUB pay for 52 weeks at the traditional 72 percent of gross pay and another 52 weeks at half pay. Workers with less than 20 years will get 72 percent SUB pay for 39 weeks and half pay for an additional 39 weeks.
  • receive regular physical exams and “participate in any subsequently negotiated recommended health coaching or disease management programs.” Smokers beware!
  • give up the option of receiving pay in lieu of vacation.
  • give up Christmas bonuses in 2009 and 2010.
  • form “Self-Directed Mechanical Skilled Trades Teams.” Management has long wanted to use “jacks of all trades” rather than highly skilled workers, and has been contracting out as much skilled work as possible. Skilled workers are paid more and have far greater job control than production workers.
  • take buyouts aimed at culling the workforce down to $14/hour new-hires.

Activists predicted that overtime and break issues would generate the most anger among workers.

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It was noticeable that most of the concessions eliminate benefits that most U.S. workers don’t enjoy: COLA, SUB pay, time-and-a-half after eight hours. Likewise, asking workers to give up something called a “bonus” doesn’t sound so bad—if you don’t know that it’s a substitute for a pay increase.

“Overprivileged” auto workers once again are getting a drubbing from their betters in the media and in Congress, all of whom see nothing outrageous in their own much higher salaries. It bears repeating: there are good reasons that auto jobs have been well-paid, relatively speaking, for over 50 years. First, before the 1980s, they belonged to a union that fought. Second, these jobs stink. You need to pay people a lot of money to be willing to spend 30 years, day after day, on an assembly line. Companies have been willing to shell out in order to get reliable workers who show up and take good care of their expensive equipment. If the pay’s no longer good, it’s not worth it.

It also bears repeating that the average hourly wage of auto workers is not the ridiculous $73 per hour figure floated in the press. The major cost difference between the Big 3 and its competitors is health care for hundreds of thousands of retirees that Mercedes-Benz and Toyota don’t have.

The concessions are not the first auto workers have made. Previously given up:

  • Pay for new-hires who work in “non-core” jobs, i.e., off the assembly line, at GM and Chrysler. At Ford, the cuts apply to all new-hires. Pay was slashed in half, to $14 an hour, in the 2007 contracts.
  • The Jobs Bank, which paid unused workers most of their pay and enabled the companies to send them out for work on community projects (though often companies didn’t bother and left them playing cards in the break room).
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Comments

The International Union Rep. that was sent to our plant to help us understand things, did nothing but dance around all of our questions, and say how a good Union member would vote yes on this, well my thought on that is--wrong. A good Union Member will and would vote NO. Think of all of the people that fought for what we are giving up so with out a fight. Vote with your morals. why should we lose more and more while the heads of the heads of the companies don't give up anything?

KH2 (not verified) | 02/28/09

Does KH stand for "Kinda Hurtin'", because if so that's my name, too. While the union bosses are wasting our dues on their kindergarten antics, us blue-collar stiffs are scratching our heads and wondering when when the working class is gonna get fed up enough to do something about it. Thanks for always being there to guide our way, Labor Notes!

KH (not verified) | 02/24/09

I am just a man.

I found a job working on an assembly line that paid a few more dollars than most.

I felt blessed to have that job and worked hard at it.

I felt pride in the job I did each day even though it was hard and heavy and sometimes dangerous and the hours were very long, but it paid my bills and my taxes and at the end of my day I had my dignity and felt satisfied because I knew I did that job to the best of my ability.

I became a member of the union and I felt blessed because I knew that that union meant a better life for its members but also that it would see its way to bringing a higher standard of living to some other man who was working on an assembly line somewhere near by and did not have the ability to strive for a better wage himself but that he too would benefit from the good my union could provide and he too could share in the dignity of earning a decent wage to provide for those he loved.

The company I worked for flourished and made record profits, and the men who managed the company were joyous and celebrated those profits amongst themselves because money was plentiful, life was now and tomorrow was a world away.

I married and started a family.

I felt blessed that my job could enable me to support my family and buy a decent home for us to live in. It wasn't a luxurious home and I knew it was over priced but it was what I could afford and again I felt blessed to have it.

I paid my bills and taxes and contributed to the community around me through those taxes and donated to various charities and food banks, knowing there were many less fortunate than I was and I felt lucky that I could help in whatever way I could.

The company I worked for made some poor choices and there were losses, but from the position I was in standing on that assembly line I was powerless to help because I was just a man and they were the company and they made the choices.

The union I pay dues to suggested we give to the company from our own pocket and give up benefits to aid their financial crisis but that 700 million dollars was fast forgotten. I don't even remember if anyone said thank you.

The government I pay taxes to did not seem to notices my sacrifice.

Times got a little tougher but I still managed to make ends meet between the layoffs and wage freezes. I tightened my belt and I hoped that things would pick up for the company and that the people in the community I lived in would once again start to buy our products.

I paid my taxes and my union dues, which sometimes seemed like a conflict of interest because the government my taxes went to did not agree that my being a member of that union was a good thing and sometimes that government slandered me in that community my taxes supported and caused some of the members of that community to become jealous and target me because I perhaps earned a few more dollars than they did.

The banks made some poor choices, and there was talk that some of the bankers were greedy and set up home owners with mortgages and bonds that were meant to fail just so they could pad their own pockets at the expense of all.

I continued to work, and watched the government I paid taxes to give those banks billions of tax dollars to try to fix the damage some had caused.

The people in the community I lived in could no longer afford to buy the products my company made and there was no longer credit available to them from the banks because the bankers decided to give themselves bonuses with the cash my government had earmarked for them to use to fix the problems that some had created.

The company where I worked fell onto hard times, some said it was caused by the banks but there was also talk that the company caused some of the trouble itself due to poor business choices and not planning for the future.

Some members of the government I pay taxes to said that my wage was to blame because my company paid me a few dollars more than other men who worked on an assembly line made.

Some journalists and economists made up stories that exaggerated and completely fabricated my life to the point of grandeur and the public took it as fact.

Then some of the people in my community started to target and abuse me. Others spread rumours about me saying I was greedy and had more than everyone else and I was a parasite.

I was shocked and saddened because this was the same community I had given to, and some of the people were my neighbours and our children played together.

My son came home from school crying because the teacher who earns much more money than me had spent time explaining to his class that my greed was the cause of my company's troubles. Of course I didn't expect him to defend me, children should not be disrespectful or correct teachers but I knew he felt shamed and helpless about not being able to and that he saw this as a blow to my dignity and his own.

Friends or some of the people I thought of as friends started to circulate email jokes about the company I worked for and though some were laughing I was unable to find humour because I had now become part of that joke and it was me they were laughing at.

The government I pay taxes to agreed to help the company I work for with loans of billions of dollars in the hope they could once again become the giant profit making machine they used to be.

I felt shocked because the government I pay taxes to offered the company I work for money from my wage and said to the company I work for and the community I live in that yes I was the problem and I should carry the blame and be ridiculed for choices I had no role in making.

The union I pay dues to and the government I pay taxes to looked the other way so it did not see my struggle as I lost the respect of the community I lived in and and gave to. Nor did they see me lose the dignity I once had at being a contributing member of that community because I could no longer hold onto the hope of a better standard of living for myself, my children or those around me.

The government I pay taxes to thinks men who work on an assembly line should not have hope of a better life and though my cost of living will remain higher than many countries who pay their workers peanuts for their hard work, I will be expected to blend in and become one of them.

After all, I am just a man who works on an assembly line and my value as an employee or a member of my society is nothing more than they say it is.

Brett Hoven, UAW 879 (not verified) | 02/23/09

We haven't really heard much in my plant. I can't believe they're giving up COLA.

Ron Lare (not verified) | 02/21/09

This is very useful. I'm taking it to a meeting of workers against concessions that will happen if there's not more snow today, and emailing it to 300 Local 600 members on Judy Wraight's and my email list. --Ron Lare, UAW 600, retired