Ford and UAW bargainers race the clock to avert a strike
Bargainers for Ford Motor Company and the United Automobile Workers Union have less than four days to work out their differences, to avert a strike by more than 100,000 hourly workers. Both sides are hoping they can meet their deadline, but based on 50 years of auto negotiations, a strike-averting settlement is likely to come within hours of the deadline at 11:59 p.m. Monday, local time.
While the UAW is demanding a 3 percent annual increase in wages from Ford, economics clearly plays a secondary role this year as the union focuses on job security. With the auto industry intent on increasing productivity, workers fear that without concrete guarantees, their ranks could be sharply whittled away.
``The whole question of job security is the major piece of this set of negotiations,'' UAW president Owen Bieber said this week. ``We must have a meaningful job security provision, or we're just not going to have an agreement.''
Earlier in the week, Mr. Bieber presented Ford bargainers with a proposal that would affect all currently employed, UAW-represented Ford workers, as well as those now on short-term or indefinite layoff - about 110,000 hourly employees.
The proposal would effectively set a permanent job level at Ford. For even if a worker were to quit or retire, it would leave a guaranteed vacancy which the company would have to fill.
The union is also seeking a ban on outsourcing - the transfer of work from Ford plants to outside suppliers - as well as a moratorium on plant closings. In fact, the UAW is urging Ford to commit itself to spending hundreds of millions of dollars to upgrade many of its aging facilities, and perhaps even open new plants.
Ford's share of the new-car market has been increasing steadily over the past several years, and its sales are constrained primarily through a lack of new production capacity, rather than a shortage of buyer demand.
``We certainly recognize that job security is the union's No. 1 priority,'' said Stanley Surma, Ford's chief negotiator. But he added that ``job security is really in the marketplace. We can't do anything in our negotiations that inhibits our ability towards quality improvement or our cost competitiveness.''
While Mr. Surma says the company will offer some additional protection, Ford would prefer not to go much beyond its current job security programs, which guarantee employment for a limited number of employees and provide a steady - though temporary - income stream for laid-off workers.
Still, if any automaker in the United States is in a position to meet the union's demands, it is Ford. Because of the growing demand for its cars and trucks, it could conceivably agree to a plant closing moratorium, effectively guaranteeing jobs - at least for the life of this contract.
Also, Ford has made some dramatic gains in productivity in recent years, contributing to its record profits. The automaker now has more than $9 billion in cash, money that could conceivably be used to meet any union pay increase.
In a highly competitive auto industry, Ford officials would prefer not to raise their fixed labor costs, but there are indications the UAW may be willing to trade off a raise for less costly lump-sum bonuses - if Ford comes up with job guarantees that are extensive enough.
``Both sides have a real problem to work out,'' says Ed Cushman, a former labor negotiator with American Motors, and now a labor professor with Wayne State University in Detroit. But Mr. Cushman, like most other analysts, remains optimistic. ``I think they have a lot of ground to cover, but I don't think it's unlikely they can work it out.''
Cushman's optimism does not extend to General Motors, the UAW's next contract target.
General Motors has far more capacity than it needs today. That's the result of a sharp decline in its sales and market share, and the fact that GM takes more man-hours to build cars and parts than its major US and foreign competitors.
Within the past 12 months, GM has announced plans to close 11 body and assembly plants, along with a number of component facilities. And a week ago the automaker's new president, Robert C. Stempel, indicated that more parts plants will be closed in the next 12 to 18 months.
That means GM is preparing for extensive employment cutbacks.
``Depending on this contract,'' Mr. Stempel will order 10 to 40 GM parts plants closed in the near future, estimates Ronald Glantz, an automotive analyst with Montgomery Securities.
And on top of that, it is pushing for a two-tiered wage structure - with component plant employees being asked to take less than workers at GM assembly lines.
That flies in the face of the UAW's goal of using the Ford contract as a pattern.
Thus, Cushman says, ``The odds of a strike at GM are clearly better than even. And it could be a long one.''