UAW Says Majority of Early Voters Reject Proposed Ford Contract

The United Auto Workers said 55 percent of its Ford Motor Co. (F) members rejected a tentative four-year labor agreement with the automaker in early voting.

In voting that began this week, 3,915 of Ford’s UAW-represented workers had cast ballots against the proposed contract, while 3,256 endorsed it, the union said yesterday in a post on its UAW Ford Department page on Facebook. That represents about 18 percent of Ford’s 40,600 U.S. hourly workers. A local in suburban Cleveland has since voted in favor of the agreement, which wasn’t reflected in the UAW’s tally.

UAW President Bob King told reporters Oct. 12 that he expected the contract to be ratified in voting that concludes Oct. 18. Ford pledged 12,000 new jobs, $6.2 billion in factory upgrades, and bonus and profit-sharing payments this year that total as much as $10,000 per worker. It does not include raises for senior workers or restore cost-of-living pay increases workers gave up to help Ford survive.

“Workers just don’t think this is a good deal after all they’ve given up,” said Gary Walkowicz, a union official at UAW Local 600 in Dearborn, Michigan, who is leading a campaign against the tentative agreement. “Times are obviously better for the company and the executives are getting raises, but they don’t want to give anything back to the workers.”

Ford earned $9.28 billion in the past two calendar years after $30.1 billion in losses from 2006 through 2008. Chief Executive Officer Alan Mulally’s 2010 compensation rose 48 percent to $26.5 million. Ford also awarded him more than $56 million in stock in March for leading the company’s turnaround.

Cleveland Vote

Workers at Ford’s engine plant in Brook Park, Ohio, yesterday approved the proposed contract with 57 percent of the votes, said Mike Gammella, president of UAW Local 1250. The factory, which employs 943 people, is gaining a third shift of workers as part of the new contract.

“This is a very good contract in a very poor economy,” Gammella. “People understand that.”

Ford borrowed $23.4 billion in late 2006, putting up all major assets including its blue oval logo as collateral. That helped Ford avoid the bankruptcies and bailouts that befell the predecessors of General Motors Co. (GM) and Chrysler Group LLC. As part of those government-backed reorganizations, the UAW agreed not to strike either automaker in this year’s negotiations.

“If workers go on strike despite Ford’s promise to create thousands of jobs, it will only add to the anti-union fervor that’s growing in the country,” said Gary Chaison, a professor of industrial relations at Clark University in Worcester, Massachusetts. “This is a rejection of the UAW leadership and a rejection of moderation.”

Facebook Posts

The UAW Ford Department said on its Facebook page Oct. 12 that union Vice President Jimmy Settles, who led negotiations with Ford, would call for a strike if the contract is rejected and give the automaker 72 hours notice of a walkout. The UAW has not had a national strike at Ford since 1976. The Facebook message also warned that strike breakers would be hired, which the union recanted.

“A post on the UAW Ford Department Facebook page yesterday related to a possible strike at Ford was not authorized by me,” Settles said yesterday in an e-mail. “I remain optimistic that the tentative agreement will pass and I am not focused on a strike at this point. Some local unions are making routine strike preparations which are always done during the negotiation process.”

Recent Votes

Workers at Ford’s Chicago assembly plant, which makes the Taurus sedan and Explorer sport-utility vehicle, voted 77 percent against the proposed contract Oct. 12, according to Walkowicz. Workers at the Wayne, Michigan, plant, which makes the Focus small car, rejected the accord with a 51.1 percent “no” vote this week.

Production workers at a Ford axle plant in Sterling Heights, Michigan, approved the agreement Oct. 12 with 66 percent of the votes, said Brian Pannebecker, a worker at the factory. Skilled-trades workers at the plant endorsed the deal with 64.5 percent, he said.

Karen Hampton, a Ford spokeswoman, said the company is confident the contract will be approved.

“The agreement is fair to our employees and improves Ford’s competitiveness in the U.S.,” she said in an e-mail yesterday. “We remain optimistic that the tentative agreement will be approved.”

The second-largest U.S. automaker earned $4.95 billion in the first half of the year, as fuel-efficient models like the Fiesta subcompact attracted buyers. Ford’s U.S. light-vehicle sales are up 11 percent this year through September, ahead of the industrywide gain of 10 percent.

Ford’s comeback may receive a setback from the contract ratification vote, even if it narrowly passes, Chaison said.

“To have even a close vote would be bad,” Chaison said. “Ford has made a very strong case it has turned the corner. If the contract is turned down, people will question how secure that comeback is.”

To contact the reporter on this story: Keith Naughton in Southfield, Michigan, at knaughton3@bloomberg.net

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

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