How Staying Solvent Could Hurt Ford

Ford Motor, the most profitable U.S. carmaker, has loudly trumpeted the fact that it was the only U.S. auto company to get through the Great Recession without help from Uncle Sam or a bankruptcy judge. It may discover that no good deed goes unpunished. Because Ford didn’t take a government bailout, it lacks two weapons rivals have: binding-arbitration clauses in its labor contracts and a ban on strikes. As the company begins contract talks with the United Auto Workers on July 29, Ford is in the industry’s most vulnerable position.

As part of U.S. government-backed bankruptcies in 2009, workers at General Motors and Chrysler Group agreed not to strike over wages and benefits during these contract talks. Ford’s union workers in 2009 went against their own leaders’ recommendation and rejected—by a vote of more than 70 percent—a round of concessions that included a strike ban and arbitration. That means Ford, which hasn’t had a nationwide walkout since 1977, today is the only U.S. automaker that faces the threat of a strike. Explains Kristin Dziczek, a labor analyst at the Center for Automotive Research: “Ratifying a deal at Ford is a bit more dicey than the other two because they’ve proven they’ll turn down an agreement.”