agent Entrepreneur logo
MenuMENU
SearchSEARCH

Wall Street Optimistic Ford/UAW Deal Will be Approved

October 18, 2011
2 min to read


Wall Street is optimistic the tentative labor agreement between Ford Motor Co. and the United Auto Workers that keeps U.S. labor costs competitive will pass in the final two days of voting.


Ratings agencies have said successful ratification of the vote is a precursor to upgrading Ford's credit rating. The automaker is hoping to return to investment grade as early as year end, a status it lost in 2006, according to The Detroit News.

Ad Loading...


Two-thirds of the 41,000 Ford workers have finished their ratification votes and 62 percent are in favor of the four-year pact.


Most of the union locals still to report will not be finished voting until Tuesday — the deadline for all 58 locals.


The agreement requires a simple majority to be ratified, at which point the agreement becomes official. Confirmation of passage is expected Wednesday.


"After some early results appeared to put ratification at risk (vote was 55 percent against early Friday), several large facilities have voted in favor by wide margins, including Dearborn Assembly (62 percent in favor) and Kansas City Assembly (88 percent in favor)," said analyst Rod Lache of Deutsche Bank in a research note Monday.


"It now appears likely the deal will pass, as the remaining 40 percent of the workforce would need to vote approx 70 percent "no" in order to swing the overall outcome."

Ad Loading...


Lache said the agreement will keep Ford's U.S. labor costs relatively flat over four years, ratification removes the risk of a work stoppage and the deal positions Ford well if the auto industry recovers in the U.S.


Additionally, "we believe that this clears one of the final hurdles to the announcement of a meaningful dividend at Ford in the relatively near future," Lache said.


Brian Johnson at Barclays Capital also said in a research note Monday that approval by Ford workers appears likely.


"Overall, we estimate the tentative contract would add about 70 cents per hour to Ford's labor costs, or about $70 million annually — assuming only 1,000 skilled trades retire," Johnson said.


"Higher attrition could lower the net cost further," Johnson said, noting Ford still has the highest cost per hour because the $58 an hour rate going into the contract was much higher than Chrysler Group LLC's $49 and General Motors Co. is expected to benefit from greater skilled trades attrition and cuts to legal services.

Ad Loading...


Barclays estimates a strike would have cost Ford $273 million a day in lost revenue and $71 million a day in lost profit, although some of that would be made up in 2012 with increased overtime, Johnson said.


"Nevertheless, a strike would have delayed any rating agency upgrade or dividend," Johnson said.

More Industry

Group photo of men outside storefront.
Industryby Hannah MitchellMay 28, 2026

Pennsylvania Dealership Under New Retailers

The sale of the Chrysler Dodge Jeep Ram store puts a family auto group on a leaner path as first-time dealers take the helm.

Read More →
Hallway with lockered wiring and computer
Industryby Lauren LawrenceMay 28, 2026

Battery Storage Takes Priority Over EVs

U.S. automakers are prioritizing battery energy stationary storage over electric-vehicle production as the consumer demand for EVs lags the rest of the world.

Read More →
Gray-scale photo of a line of Mini cars in a dealership parking lot
Industryby Hannah MitchellMay 27, 2026

Auto Dealers Feel Better But Not Great

A second-quarter Cox Automotive poll of franchised retailers and independents found better views of the current market after a good spring but anticipation of third-quarter storminess.

Read More →
Ad Loading...
Closeup photo of the front of a white car
Industryby Hannah MitchellMay 21, 2026

New-Vehicle Sales Picture Relative

A May forecast is complicated by last spring’s trade tariff effects on auto retail. Despite continued hard realities, many consumers took advantage of ways to bite the bullet.

Read More →
Nissan logo on front of building
Industryby Lauren LawrenceMay 21, 2026

Auto Group Acquires Third Nissan Rooftop

Iowa-based Coleman Automotive Group recently acquired its seventh dealership, McGrath Nissan, which it renamed Nissan of Elgin.

Read More →
Couple talking with auto salesman next to new car inside dealership
Industryby Hannah MitchellMay 20, 2026

April Less Affordable

Based on prices, reduced incentives and slower household income growth, consumers found it more challenging to buy new last month, Cox Automotive reported.

Read More →
Ad Loading...
Wooden people figures of different colors in a row, similar to board game pieces
IndustryMay 20, 2026

Building an Extraordinary F&I Agency

Work to determine your specialized talent, because that fact will determine everything about your agency’s future.

Read More →
Ingredient card, policies and procedures, fixed operations, variable operations, data security, audit
Industryby Jim GantherMay 19, 2026

Recipe for Compliance

The secret to both amazing barbecue and compliance is the same: understanding the basics and committing to a process.

Read More →
Photo of new Chevrolet Bolt parked on a beach
Industryby Hannah MitchellMay 14, 2026

EVs Getting More Attractive

A growing percentage of U.S. consumers are open to switching and fewer are adverse to the idea, according to a recently completed survey. That’s despite the end of a tax break.

Read More →
Ad Loading...
Benchmark bar graph showing April 2026 EV Sales
Industryby Lauren LawrenceMay 14, 2026

EV Sales Drop in April Following Surge

North American electric-vehicle sales were down 28% year-over-year, a sharp contrast from global EV sales growth of 6%.

Read More →