Ford UAW Contract Ratification Assured

Ford Motor Co. workers have ratified a tentative labor agreement not necessarily because they liked it, but because many felt it was the best they could get in today's economy.

As final results from the United Auto Workers locals were reported late Tuesday, it became mathematically clear the agreement had passed after a groundswell of "yes" votes in the final days of voting, reported The Detroit News.

Cementing ratification was a narrow 53 percent approval by about 5,000 members of Local 862 representing workers at the Kentucky Truck and Louisville Assembly plants.

Romeo Engine also approved the deal overwhelmingly: 492 in favor and 128 against. The Sharonville transmission plant in Cincinnati was in favor with a vote of 994 to 354. The Lima, Ohio, engine plant also approved the deal.

The Walton Hills, Ohio, stamping plant that will close by the end of the contract rejected the agreement 273 votes to 44.

The UAW, whose top officials recommended its passage, was expected to confirm the deal's ratification Wednesday.

Approval of the four-year agreement that keeps Ford's costs in line with its domestic competitors should prompt a hike in the automaker's credit rating. Ford is hoping by year-end to return to the investment grade status it lost in 2005.

"That's the hidden dimension here," said Harley Shaiken, a labor professor at the University of California-Berkeley. Returning to investment grade, he said, will make it "significantly less costly to invest money."

Last month, a day after General Motors Co. ratified its labor contract, Standard & Poor's raised GM's corporate credit rating two notches to "BB+," saying the deal provided for GM's continued profitability and cash generation in North America. BB+ is one notch below investment grade.

GM said the new labor deal will only raise its labor costs by 1 percent annually over four years.

S&P said at the time it expects to also raise Ford to "BB+" with a stable outlook if Ford ratified an agreement that does not put it at a disadvantage relative to GM.

When the deal was announced Oct. 4, Ford's John Fleming, head of labor affairs, said the terms improve the competitiveness of the Dearborn company, and keep labor costs in line with the current $58 an hour in wages and benefits.

Shaiken said investment grade will make Ford even more competitive and likely to invest in the U.S.

The proposed contract was all about jobs and investments: 12,000 jobs including 5,750 entry-level positions not previously announced, as well as $16 billion in investment of which $6.2 billion would go into plants. That includes work that would have been done elsewhere such as China, Japan, Mexico and parts of Europe.

Heading into the final day of voting Tuesday, 63.2 percent of Ford's 41,000 were in favor of ratification with 16,691 votes in favor and 9,698 rejecting the deal.

The 6,993-vote difference — with about six of 58 locals still to report representing about 9,000 workers — was considered too large for the naysayers to bridge.

Final-day results were still pending from the Avon Lake, Ohio, assembly plant.

Some large locals rejected the deal in early ratification votes, including Michigan Assembly and Chicago Assembly. But the results alarmed many workers and drew larger numbers of employees who approved the pact in later votes, including members at AutoAlliance International in Flat Rock; Dearborn Truck; Twin Cities in St. Paul, Minn.; and Kansas City.

"We got more jobs," said Paul Vella who works at the Livonia Transmission plant that approved the deal by about 77 percent and is hoping to be awarded future work building an 8-speed transmission when the 4-speed they are making is phased out.

"The economy's bad and I'm just happy to have a job," he said.