UAW/Ford Contract Negotiations Ramp Up

The template, or pattern, for negotiations has been set by the General Motors agreement and will be used to reach similar terms for contracts at Ford and FCA.

“Ford and the UAW have to figure out what the company gets out of this deal,” said Kristin Dziczek, vice president of industry, labor & economics at the Center for Automotive Research in Ann Arbor, Mich.

“The elimination of the wage gap between in-progression [workers] and legacy [workers] will be costly and Ford will want offsets,” Dziczek told the Detroit Free Press. “Ford has some powertrain capacity issues, but will not be able to achieve anywhere near the cost savings that GM did by shuttering Lordstown and the three other locations. The company knows it won’t get far in increasing health care cost share, but they may pursue other health care cost savings strategies that also would improve individual health care outcomes.”

The last four years have been profitable ones for automakers and it will be difficult to justify any concessions asked of workers. However, the auto industry appears poised for a downturn in sales just as it will incur higher production costs as it invests in electric car technology. A point in Ford’s favor, is the higher percentage of vehicles made in the U.S. compared to its competitors, as well as exceeding its promise in the last contract to invest $9 billion in U.S. facilities.

Ford will try to avoid a strike like the one at General Motors that cost the company an estimated $2.9 billion. Although avoiding a walk-out is preferable, the UAW is most likely to stand its ground rather than concede any major terms that were settled with GM.