Lately, media outlets have been giving a fair amount of attention to the United Auto Workers’ frictions with Ford Motor Co. over the contracts for automotive employees.
Early on Tuesday, a tentative agreement was reached that will allow raises for entry-level Ford employees, new jobs, and billions of dollars in investments.
The new four-year national labor contract, which hasn’t yet been ratified by the UAW, covers more than 40,000 auto employees in theUS. The Ford-UAW deal will retain or create 12,000 jobs, bringing some production positions back fromMexico,ChinaandJapan.
The Ford Fusion, which was previously manufactured inMexico, will now be assembled in Ford’s Flat Rock, MI plant. This move will employ 1,600 workers to assemble the next-generation Fusions at the plant, which is set to receive a $500 million investment for upgrades.
Of the 12,000 jobs to be retained or created, 5,750 of them will be new positions and are to be added by the end of 2012. The majority of these jobs will be entry level.
Since 2007, most entry-level workers at the Big Three – Ford, Chevrolet and General Motors – have been hired on a tier-two wage system, earning about half that of veteran employees. The deal with the UAW will provide new Ford workers with raises, bringing the highest paid entry-level additions up to $19.28 per hour, compared to the $14 per hour assigned since 2007.
In addition to providing raises, the Ford-UAW deal also outlines plans to offer most employees a $6,000 signing bonus to be received if the contract passes. This amount would drop to $5,000 for workers with less than one year of their start date.
Details about buyouts are also included in the contract in attempts to replace highly paid employees with those at entry-level. Ford indicated that they would offer buyouts of $50,000 to production workers and $100,000 to skilled-trade employees.
The UAW deal would call on Ford to invest $16 billion into creating and retaining jobs, expansions, and updating plants across the country, $2.4 billion of which was previously unannounced. After General Motors, Ford is the second-largest automaker in theUS.
Last week, GM and the UAW worked together to formulate a deal that would include the creation of 6,400 new jobs as part of a four-year contract. Working with all of the Big Three, the UAW is still in talks with Chrysler, whose 2007 contract has been extended through October 19.
In an economy that’s still suffering and seemingly on the verge of slipping back into recession, the auto industry has proven to be an important source of economic growth and job creation, while most sectors of employment have fallen behind.
As of July 2011, there has been a 12% increase in the number of workers employed by the Big Three – from 623,000 to 700,000. If theUSautomakers hold up their end of the deal and are able to pass their contracts by the UAW, this number will only continue to rise.
In a nation built largely upon the auto industry, it’s reassuring to see how that market has managed to weather the economic distresses of recent years and carry on to employ Americans around the country.
Bunkley, Nick. “Ford Reaches Contract Deal With U.A.W.” The New York Times http://www.nytimes.com/2011/10/05/business/ford-reaches-contract-deal-with-uaw.html Accessed 10/4/11.
Snavely, Brent. “Ford has tentative deal with UAW, includes 5,750 new jobs” http://content.usatoday.com/communities/driveon/post/2011/10/ford-has-tentative-new-deal-with-uaw/1 Accessed 10/4/11.
“UAW, Ford Reach Tentative Labor Deal; To Add 12K Jobs” RTTNews http://www.cvent.com/events/the-2011-opportunity-finance-network-conference/event-summary-d6e0162d89954be38a82e68ae81083f5.aspx Accessed 10/4/11.