The United Auto Workers yesterday reached a tentative agreement with the Ford Motor Co. on a three-year contract covering 115,000 workers, a settlement similar to the General Motors Corp. contract that won final approval last night in voting by unionized GM employes.
The agreements at the world's two largest auto makers would earmark up to $1.3 billion in "job security banks" for displaced workers and would return to UAW members a substantial portion of the $3.5 billion in wage and benefit concessions that the union granted in 1982 at the depth of the U.S. auto industry's recession.
While the UAW achieved a measure of job security and economic gain in the new agreements, GM and Ford officials said their companies are satisfied because the contracts do not limit their ability to automate and use overseas auto suppliers and because the 2.25 percent yearly average base wage increases are modest by industry standards.
"As a result of this tentative settlement, the UAW workers at Ford will have greater job security than ever in history," a haggard UAW President Owen F. Bieber said after a marathon 24-hour bargaining session at Ford's world headquarters in Dearborn, Mich. "The tentative agreement also provides significant economic gains immediately, and in the years ahead," he said.
Stanley Surma, Ford's executive director of labor relations, said his company does not consider it a costly settlement. He also said "it gives us the ability to remain flexible in the way we conduct our business and to continue our efforts to remain competitive."
Job security and wages were the crucial issues at both companies during the negotiations that began in July and were described by both sides as the most complicated and crucial in the industry's history largely because of the increasing threat of foreign competition and the quickening pace of automation.
The 1.2 million-member UAW, which has lost 200,000 jobs since 1978, sought protection against further erosion of American automobile jobs and also tried to recoup wage concessions from the two companies, which are now enjoying record profits. The combined profits of GM and Ford topped $5 billion last year and are projected to exceed $8 billion this year.
Maintaining a tradition of "pattern" agreements, the Ford settlement is virtually identical to GM's, company and union officials said.
The GM settlement covering 350,000 unionized workers came after a seven-day selective strike at 17 GM plants that ended Sept. 22 and cost the company an estimated $100 million. The GM contract gained approval on a vote of 138,410 in favor to 102,528 opposed, or 57.4 percent to 42.6 percent, a UAW spokesman said last night in Detroit. The Ford contract will now be put to a vote.
Chrysler Corp.'s contract covering about 65,000 UAW members does not expire for a year, but union officials have said they will seek an early reopening of negotiations with the now-resurgent No. 3 auto firm.
The UAW initially sought to protect jobs by winning specific curbs on subcontracting and outsourcing, the use of parts made by non-UAW workers in this country or abroad. But both Ford and GM were adamantly opposed. Industry analysts have said the job bank arrangements amount to a multimillion-dollar "license" for the companies to continue automating and outsourcing, although the added cost of the bank may slow the process a little.
Ford, like GM, agreed to set up a job bank intended as a six-year safety net. The bank is available to any worker with one year of experience who loses a job because of automation, plant closings, or outsourcing.
GM's job bank will be up to $1 billion. Bieber said Ford's will total up to $300 million in keeping with its smaller size. Any worker placed in the job bank receives full pay while being retrained and/or until being placed in a new job. If another job does not become available, the worker is to be paid for at least the life of the job bank, six years.
Yesterday's agreement followed an unusual meeting between Bieber and Ford Chairman Philip Caldwell, who had not participated directly in talks. Caldwell, according to UAW officials, agreed to write a "side letter" to the contract pledging to begin new small-car production in the United States. A similar pledge was made by GM Chairman Roger Smith in reference to GM's Saturn project for small-car production.
But the specific terms of those commitments are not yet set, and the agreements must apparently be affirmed by both companies' boards of directors.
Other provisions of the settlement include first-year raises averaging 2.25 percent, followed by lump-sum payments of 2.25 percent in the next two years. The companies prefer lump sums because they are not figured in workers' overtime, vacation and other benefits. The agreement also continues cost-of-living adjustments and a profit-sharing program.
The UAW estimates that the average assembly line worker, whose hourly wages are now $12.82, would receive $14.42 in the third year, assuming a 5 percent inflation rate. Including overtime, most auto workers earn $25,000 to $30,000 a year.
Assuming that corporate profits and inflation continue as expected, the average worker would receive increases totaling $12,000 over three years, the UAW said.
Pensions will increase substantially under the new contracts, which the union and the companies see as a possible inducement for early retirements that could ease the threat of layoffs. Workers with 30 years' service will be able to retire before age 62 and receive $1,205 per month.