The United Auto Workers union and the Ford Motor Co. announced agreement last night on "a basic economic framework" for a new two-year contract calling for major wage and benefit concessions by the company's 106,200 union workers.
Both sides emphasized that critical job security issues must still be resolved before full contract agreement can be reached. But UAW President Douglas Fraser said they did not appear to be "insurmountable."
There was no immediate indication of the total labor savings involved, but there were some estimates that the savings could be as high as $500 million over the life of the agreement. Ford is expected to announce a 1981 loss of more than $1 billion next Thursday.
Negotiators said full agreement could be reached this weekend. "We have a few details to finish in the economic proposal . . . but we don't see them as insurmountable," Fraser said last night in Dearborn, Mich., where the two sides have met for the last 11 days.
UAW officials said there could be no contract until issues concerning job security and the use of outside contractors to produce Ford parts were resolved.
"We've said all along that we have to have solutions to our problems, or we won't have a contract," UAW chief spokesman Don Stillman said last night. "We didn't come into these talks just to talk about concessions."
Peter J. Pestillo, Ford vice president for industrial relations, said negotiators will work on "the problems of Ford workers" this weekend. "One small issue" in the remaining negotiations could scuttle all progress made so far, Pestillo said.
"We don't have a formal deadline, but the weekend is what we're shooting for," Stillman said.
Stillman said the union hopes to have a tentative agreement ready in time for a UAW executive board meeting Sunday. The executive board session will be followed by skilled trades and production unit meetings in Detroit next week. The union's Ford bargaining council will meet Wednesday in Chicago to consider a tentative contract, or any other product of the talks, Stillman said.
The new contract agreement, if approved by the union's 225-member Ford bargaining council and a majority of its rank-and-file members at Ford, would replace a three-year contract expiring Sept. 14. It would also give Ford--the nation's second largest automaker--both an economic advantage and a public relations victory over the first-ranked General Motors Corp.
GM's efforts to win concessions from the UAW ended in failure Jan. 28. The union and GM had based their talks on an "agreement in principle" that any labor cost savings would be passed on to consumers in the form of lower sticker prices on GM cars and trucks.
Though details of the Ford negotiations were few, the union appears to have gone along with the company's basic economic proposal calling for a freeze in cost-of-living allowances, a lower wage for new hires, and a sacrifice of eight paid personal holidays.
Ford has proposed establishing a fund that would pay at least 50 percent of the base pay of workers with 15 years of seniority or more. The company also has promised to beef up the company's supplemental unemployment benefit program for workers with at least 10 years of seniority.
We've agreed on most of the economic basics, wages, time off and that sort of thing. We're still having discussions on issues like profit sharing," Stillman said.
Ford asked for a contract that would extend through Sept. 14, 1984--one year shorter than the traditional three-year agreements in the domestic auto industry. Union officials indicated last night that the UAW has agreed to that.