Automaker Seeks To Ensure Survival
By Sholnn Freeman
Washington Post Staff Writer
Friday, October 26, 2007
As Chrysler's labor contract moved closer to ratification yesterday, the spotlight began shifting to Ford, the final Detroit automaker yet to work out a union deal.
United Auto Workers officials are expected to turn to Ford in the next few days to complete contract negotiations that began in July.
Among the Detroit automakers, Ford is viewed as the most troubled. Battered by a drop-off in U.S. truck and sport-utility vehicle sales, last year it surrendered its No. 2 position in U.S. sales to Toyota and posted a loss of $12.6 billion. It has borrowed $23 billion and is breaking up its European luxury division to raise cash.
Ford's precarious position means that UAW President Ronald A. Gettelfinger, who once worked in a Ford factory, is unlikely to push a deal that could bury the century-old company, analysts have said.
"The ultimate objective is to do whatever it takes from the union standpoint to make sure Ford stays in the game," said David E. Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich. "In no way, shape or form is the failure of Ford Motor Company an option."
Given that its survival is at stake, Ford might push for concessions that go further than what General Motors and Chrysler demanded. However, Cole said he did not expect a strike at Ford, as happened with the other two automakers in the current round of contract negotiations. GM workers approved a new contract late last month.
For example, Cole said Ford could ask for a temporary wage cut of as much as 10 percent. Under the scenario, Ford would pay workers back wages once the company returned to profitability.
Any such cut on that scale is sure to run into worker demands that the company guarantee that it will keep plants open -- the issue that imperiled the Chrysler contract.
Gary N. Chaison, professor of labor relations at Clark University in Worcester, Mass., said he expected the Ford agreement to be a hard sell to union members.
"Ford is going to ask for special breaks, and it's not going to be in the position of offering any type of employment guarantees," Chaison said. "The agreement that will be reached at Ford is going to have very little in terms of gains and a lot in terms of losses."
Ford employees are already on edge. Darryl Nolen, the UAW plant chairman at a Ford's SUV factory in Wayne, Mich., said speculation that the plant could close has workers worried. Ford has said it expects to close as many as 16 factories by 2012 but has so far identified only 10.
"It's quiet on the shop floor," Nolen said. "Everyone, no doubt, is concerned by what the talks will bring. Within a week or two we may know the fate of the plant."
The Chrysler deal appeared close to passing after workers at four plants outside Detroit approved the deal on Wednesday night, according to a person familiar with the process who spoke on condition of anonymity because results are not official. Voting at one remaining Chrysler assembly plant, in Belvidere, Ill., is scheduled to begin today.
The plants account for about one-fifth of the 45,000 Chrysler factory workers covered by the contract.
The UAW represents about 55,000 workers at Ford.
The Chrysler deal faced widespread opposition from members who feared that the union gave up too much without company commitments to keep the plants open.
"It looks like my local has passed it, and I'm afraid that it might pass overall," said Brett Ward, a worker at Chrysler's Sterling Heights, Mich. assembly plant, whose employees voted Wednesday.
He said that in the contract, Chrysler did not guarantee that it would continue to produce cars at the plant once production for current models ends. The factory builds the Chrysler Sebring and the Dodge Avenger.
"We are extremely vulnerable," he said.
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