DEARBORN, MICH. -- It seemed more hype than substance: Top executives walking the corridors of Ford Motor Co.'s world headquarters here, flashing white "mission cards."
The cards described Ford's rededication to quality and craftsmanship and told of something "new" -- caring and sharing between labor and management.
That was in November 1985, near the end of a seven-year economic purge that saw Ford chop its U.S. hourly payroll by 45 percent, eliminating some 86,000 jobs. With that backdrop, there was skepticism aplenty over the often-evangelical talk about a "corporate cultural revolution" to weld Ford bosses and workers into a winning team.
But no one is laughing today. Riding a wave of prosperity, Ford Motor Co. and the United Auto Workers union have signed a historic labor agreement granting unprecedented job security in the U.S. auto industry and giving employes a widely expanded role in running the business.
Ford has gained advantages, too. The tentative agreement, now undergoing a ratification vote by the company's 104,000 UAW-represented employes, allows the reduction of job classifications and the training of hourly workers to do more than one task. Employment in the enterprise is guaranteed. Specific assignments are not.
It is that combination of job stability and management flexibility that has helped Japanese auto makers build cars and trucks at lower costs and with better quality than their American rivals.
Still, the Ford-UAW agreement is sending shock waves through both business and organized labor. The idea of guaranteeing jobs in an economy where virtually nothing is guaranteed travels poorly on Wall Street. And the notion of dismantling sacrosanct job classifications for the greater corporate good strikes some labor leaders, including some in the UAW, as dangerously wrongheaded.
"It's not a great contract, because the precedents it sets in the area of employment could become a problem for industries down the road," said Susan G. Jacobs, vice president and manager of automotive research at Merrill Lynch Economics in New York.
The Ford agreement, for the next three years, attempts to ensure the employment of most of the 104,000 active UAW-represented employes currently on its payrolls. Layoffs are allowed only if sales drop, and then only if the decline is not caused by sales of imported cars, such as the subcompact Festiva and Tracer models, made abroad but sold by Ford in the United States.
The right to lay off workers for economic reasons is a big loophole, Jacobs said. "It makes the contract more acceptable" to the financial community, she said.
But, generally, fixing employment numbers is seen as a "restriction on management" that could hamper corporate ability to control production costs, she said.
The 3 1/4-pound Ford-UAW labor agreement, worked out in interminably long meetings here, also sets up several committees to allow local plant officials and UAW leaders to find ways to cut costs and improve product quality.
The jointly administered committees, such as the "best-in-class quality" group, give the UAW a big say in product plans and development and in worker training.
But by encouraging the elimination of job classifications and by drawing hourly people deeper into administrative and supervisory roles, the contract threatens to erode traditional lines between labor and management. At best, some concerned UAW officials say, the agreement could be used by Ford to play one plant against another in a bid to win new product lines by establishing work rules the company deems favorable.
New products are the lifeblood of assembly plants in an auto industry where foreign competitors are churning out redesigned and often-improved vehicles every two or three years.
"I've got some reservations about this contract," said Russ Leone, unit president of UAW Local 600 at the sprawling Rouge assembly plant here. "This job-classification provision seems to be an open-ended thing, something that could really lead to whipsawing between plants. It's like the company is leaving it on the back of the workers to negotiate the work-rule changes it wants."
Leone nonetheless predicted that the contract will be ratified overwhelmingly by Wednesday, when rank-and-file voting is scheduled to end.
"Why not?" asked Thomas O'Grady, president of Integrated Automotive Resources, an auto industry consulting firm in Wayne, Pa. "It's an incredible, unprecedented industrial labor contract. There's a lot in there for the company and the union. Ford should end up with a very happy work force after this settlement."
But "unprecedented" does not mean the contract is universally applicable, O'Grady said. The agreement is Ford-specific. It is not a template for the rest of industrial America, he said.
Many analysts agree. Indeed, the Ford-UAW agreement is not likely to survive in present form at General Motors Corp., where the UAW currently is working on a new three-year contract, analysts said.
The reason? Times have changed.
In its infancy, Ford Motor Co. was the world leader in automotive sales.
It relinquished that position to an increasingly savvy GM in 1930. By the mid-1930s, Ford fell to third place behind GM and Chrysler Corp. Shortly after the end of World War II, the company moved back into second place behind GM where it stayed throughout much of post-war era, seemingly willing to play follow the leader in almost every aspect of the business, including labor-management relations.
Back then, when the UAW wanted a major new agreement, it went to GM first to set the pattern. The UAW won its first paid-vacation agreement in negotiations with GM in 1940.
In 1948, GM offered the union its first "annual improvement factor" raise, an attempt to compensate workers for regular productivity increases. That same year, GM-UAW negotiators also broke new ground by establishing cost-of-living-allowance (COLA) raises to help protect hourly incomes against the ravages of inflation.
There also were some "firsts" at Ford during that company's lengthy me-too period. For example, in 1955, Ford offered the domestic auto industry's first supplemental unemployment benefits (SUB) program. That marked an important victory in the UAW's long-running battle for a guaranteed annual wage, one that would support workers through regularly scheduled layoffs -- such as a plant shutdown for new-model changes -- and through market-generated unemployment.
But mostly, the tendency was to knock on GM's door first.
Then came the recession of 1979-1982. Ford lost $2.44 billion during that downturn, but GM escaped relatively unhurt.
Frightened by its massive fiscal damage, Ford launched a brutally efficient cost-cutting campaign, eliminating $4 billion in annual operating costs by 1985.
In tandem with that action, the company trashed its slavish imitation of GM's boxier product design. By 1983, Ford was rolling out then-radically styled, aerodynamic cars like the Tempo and Topaz and Lincoln Mark VII.
The aero products took root in a domestic car market desperate for a new look. Several years later, when Ford introduced its popular Taurus and Sable cars, the swooping aero look had become an industry standard. And Ford had become rich.
Ford earned $3 billion in the first half of 1987, compared with $1.9 billion for GM in the same period. Ford's production costs are 10 percent per car lower than GM's, largely because Ford already has done much of the cost-cutting that many analysts say GM still has to do.
For example, Ford relies on less-expensive, non-UAW labor for about 50 percent of its automotive components, which means it builds an estimated 50 percent of those parts in-house. By comparison, GM builds 70 percent of its components in-house.
According to auto industry officials and components suppliers polled this year by Chicago-based Arthur Andersen & Co., GM will have to reduce its in-house component work by about 25 percent by 1990 if it wants to remain competitive. GM itself claims that it can do without some 58,000 of the 120,000 jobs it has in component work.
For those and other reasons, the job-security pact that is "acceptable" at Ford "would be disastrous at General Motors," said Jacobs of Merrill Lynch. O'Grady of Integrated Automotive Resources put it this way: "This contract doesn't stand a chance of acceptability at GM. If the UAW presents it, they might as well go on strike."
Even one well-respected UAW associate, who asked not to be identified, expressed pessimism. "If GM UAW members say: 'Give us the Ford contract,' that could cause a big political problem for the union," the associate said. "The GM and Ford structures today are radically different. There is a very logical and rational case that can be made as to why GM can't follow Ford in this. But that's a difficult case to make to the membership."
However, UAW officials publicly insist that there is enough leeway in the Ford pact to make it acceptable at GM. Besides the provision for economic layoffs, the Ford contract contains numerous opportunities for labor-management cooperation, such as a joint-venture program to establish nonautomotive businesses that could absorb displaced auto workers.
Negotiations at both auto makers were to replace three-year contracts that originally expired at 11:59 p.m. Sept. 14. In what UAW and company officials described as proof that labor-management relations have come of age at Ford, the Ford contract was extended until Sept. 17, when the tentative new agreement was reached.
Bargaining was held in abeyance at GM until the Ford matter was settled and is not expected to intensify until after Wednesday, at the conclusion of rank-and-file voting on the Ford pact.
Can GM possibly produce a Ford-type agreement?
The question brings smiles to the faces of Ford executives.
"I don't know," said Peter J. Pestillo, Ford's vice president for employe relations and external affairs. "Surely, you understand that GM is not my concern. But it looks like we're doing okay here."