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Ford, UAW Agree to Bargain Past Tonight’s Contract Expiration

Ford Motor Co. (F) and the United Auto Workers agreed to bargain past tonight’s expiration of their current labor contract while the union also pursues new labor agreements at General Motors Co. (GM) and Chrysler Group LLC.

Ford declined to comment about details of its talks, Marcey Evans, a Ford spokeswoman, said yesterday in an e-mailed statement. The four-year contract expires at 11:59 p.m. New York time. The union’s current contracts with GM and Fiat SpA- controlled Chrysler expire at the same time.

Typically, the UAW reaches an agreement with one automaker and uses that accord to set the so-called pattern with the others. The pattern for this year’s contract will be set by “General Motors or Chrysler, but it will not be Ford Motor Company,” Jimmy Settles, vice president of the union’s Ford department, said in a posting on the union’s Facebook page.

Settles said that he informed Ford yesterday he would extend the union’s current contract while not providing a timetable for when a tentative agreement may be reached.

The Detroit-based UAW represents 113,000 workers at the automakers. Union President Bob King has said he’s open to compensation that may include lump-sum payments, rather than raises, that are tied to profit sharing and achieving productivity and quality goals.

Signing Bonus Proposal

The UAW proposed a signing bonus of $8,000 to $10,000 for each member, four people familiar with discussions said last week. Such a bonus may help sell the deal to union members looking to be repaid for what King has estimated as $7,000 to $30,000 in concessions they each gave since 2005.

Workers at Detroit-based GM, Ford and Chrysler received signing bonuses of $3,000 after they ratified the current contract in 2007. Prior to that, signing bonuses had been around $1,000, Harley Shaiken, a labor professor at the University of California at Berkeley, said last week.

Previous concessions included surrendering raises, bonuses and cost-of-living adjustments as well as agreeing to a two-tier wage system, where new hires are paid about half as much as senior employees. With GM and Dearborn, Michigan-based Ford profitable, workers have said they want to recover what they gave up.

Workers at Ford have filed an “equality of sacrifice” grievance against the automaker after salaried workers received raises, tuition assistance and 401(k) matches last year. An arbitration hearing on that dispute is scheduled for tomorrow.

No-Strike Pledges

UAW members agreed to a no-strike pledge at GM and Auburn Hills, Michigan-based Chrysler as part of their U.S.-backed bankruptcies in 2009. Unsettled disputes at the automakers are to be decided through binding arbitration. Ford didn’t receive a U.S. bailout and UAW members there went against the wishes of union leaders and rejected a strike ban and arbitration.

The key issues are signing bonuses, increasing the $14-an- hour wage for new hires and investments in U.S. plants to secure future work. GM executives have said that they want to tie compensation to company performance targets, which the union has traditionally opposed.

Chrysler Chief Executive Officer Sergio Marchionne said yesterday the U.S. carmaker isn’t “close” to an agreement with the UAW.

“I don’t have a contract,” Marchionne told reporters at the Frankfurt motor show. “We are not near.”

To contact the reporters on this story: Keith Naughton in Southfield, Michigan at knaughton3@bloomberg.net; David Welch in Southfield, Michigan at dwelch12@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

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