Ford Motor Co. and the United Auto Workers yesterday reached tentative agreement on an unprecedented 31-month contract intended to revive the company and preserve union jobs.
The major concessions by UAW negotiators were a nine-month wage freeze and the elimination of nine paid holidays per year as well as bonuses for working Sunday. Cost-of-living pay increases that were due this year under the UAW contract with Ford will not be paid until after December.
In return, Ford made a two-year commitment that it would not close plants solely to obtain parts and components from foreign or non-UAW plants in this country.
While the agreement doesn't bar Ford from closing plants because of poor sales, the company has pledged to try to reduce its work force through attrition rather than layoffs.
The negotiating agreement was reached late last night at Ford headquarters in Dearborn, Mich., in the 13th consecutive day of negotiations. If ratified by the UAW's 170,000 Ford members, the contract would take effect immediately and end Sept. 14, 1984.
In the agreement, Ford promised to establish a $70 million fund to restore supplemental unemployment benefits (SUB) to eligible workers who are not now receiving the payments because Ford's SUB fund ran out of money. Ford also would increase its regular contribution to the fund.
The union achieved one of its key symbolic goals when Ford agreed to set up a trial program to provide lifetime employment to workers at two plants to be selected later. Lifetime employment is a primary benefit received by Japanese auto workers.
Ford also agreed to a profit-sharing plan with the UAW, beginning in 1983 if Ford has recovered by then, and an "employment guarantee" agreement in which workers with 15 years' seniority or more would receive 50 percent of their income if they are laid off, until they reach age 62 or retire.
The percentage payment would rise for workers with more than 15 years' seniority.
The union is also entitled to reopen the contract if there is a major increase in Ford sales.
Douglas A. Fraser, UAW president, and Donald Ephlin, head of the UAW's Ford division, said the agreement "represents a major achievement in terms of providing members at Ford with greater job security."
The task of selling the agreement to UAW members begins today at a union executive committee meeting. The UAW's 225-member Ford bargaining committee representing local and district union leaders will meet Wednesday in Chicago to review the pact. Ford Chairman Philip Caldwell, who was not present at the negotiations, issued a statement saying the agreement should "be the catalyst for restoring the company's competitiveness."
"While we did not achieve everything we thought, the agreement augers well for our employes, the union, the company and the nation," the Ford chairman said.
Ford officials gave no estimate of how much the agreement would save the No. 2 auto company. Industry analysts had concluded earlier that the concessions the negotiators were working on could represent savings of $500 million or more a year.
Ford has 54,830 UAW workers on indefinite layoff and another 11,450 will be laid off temporarily next week as a result of large inventories of unsold cars. There were 104,700 UAW members at work at Ford last week.
Ford's UAW workers already had received the final 3 percent annual pay increase provided in the current contract, signed in 1979. Under the agreement reached yesterday there would be no further percentage pay increases through the end of the contract.
Workers still would receive cost-of-living increases, but three increases due this year would be deferred until after December, when the UAW workers would receive both the regular and the deferred increases.
Assuming an annual inflation rate of 7.5 percent, a UAW member now earning $11.67 an hour would remain at that rate through December, but by June, 1983, would be making $13.66 hourly, the UAW said.
The profit-sharing plan would be triggered whenever Ford's pre-tax annual profit exceeded 2.6 percent of sales revenue, excluding certain of Ford's non-automotive subsidiaries.
Payments would be based on UAW members' pay levels, and union officials said that had the plan been in effect in 1977, a good year for Ford, the average UAW member would have received profit sharing of $486. Ford has lost $2.5 billion over the last two years, and it is far from certain that profit sharing would be paid this year, based on the current outlook for auto sales.
The ratification process by the union is expected to last two weeks.