Ford Motor the largest producer of vehicles and the largest employer of UAW-represented autoworkers, with ~55,000 hourly employees in the U.S., confirmed today that it has reached a four-year contract. It will result in a $700 million Q4 charge, primarily associated with a ratification bonus that prompted only 56.3% of UAW Ford members to ratify the 2019 Collective Bargaining Agreement.
“Every Ford employee and temporary employee will be at the top-rate for full-time status at the end of this four-year agreement,” said Acting UAW President Rory Gamble, who is Director of the UAW Ford Department. “This is a life-changing.”
The International Executive Board recently put Gamble in charge to address the egregious misconduct that was revealed by FBI criminal investigations of Gary Jones, in the fraudulent diversion of funds from FCA Fiat that were supposed to support UAW worker training1.
Jones had refused to stand down as president during the contract talks as criminal investigations ensue. A two-year probe has already led to the convictions of five people affiliated with the UAW and three Fiat Chrysler executives. Michael Grimes, a retired senior official with the union’s GM division, charged with wire fraud and money laundering for allegedly receiving $2 million in kickbacks from UAW vendors has pled guilty to stealing from union members over a period of nearly 12 years, 2006 and July 1, 2018.
The agreement covers UAW-represented hourly employees in Ford manufacturing facilities in Michigan, Ohio, Kentucky, Missouri, Illinois and New York. There will be no more permanent temporary situations and no more permanent tiers.
The ratified contract includes an economic package of a $9,000 per full-time member signing bonus, performance bonuses, two 3% annual raises and two 4% lump sum payments and holding the line on health care costs.
The terms of the new agreement provide Ford with opportunities to improve its manufacturing and operational fitness, including:
- Increased use of temporary employees
- Closing one engine plant, improving powertrain manufacturing capacity utilization, while offering all workers jobs at a nearby plant
- Special retirement program that will improve workforce composition, lowering labor cost
- No increase to pension obligations or payments to retirees
- Ford’s hourly employees also receive a number of benefits, including:
- $9,000 ratification bonus for full-time permanent employees and $3,500 for temporary employees
- Guaranteed path to permanent full-time employment for temporary employees
- Wage increases, bonuses and continued profit sharing, allowing employees to share in the company’s success
- Opportunity for current in-progression and temporary employees to achieve top wage rate by end of agreement
- This agreement keeps Ford’s labor cost structure similar to its domestic competitors.
A Ford spokesperson told AutoInformed that further details will be released at a later date, and declined to elaborate on specific plant actions.
“I want to thank the Ford National Negotiating team and the many UAW staff and members who stood together and crafted a strong contract for both today’s members and future members,” said Gamble. “Ford’s commitment to job security and assembly in the United States is a model for American manufacturers.”
The UAW will proceed to pattern bargaining with FCA on Monday.
1 Message to UAW Members from Gary Jones on November 15:
“I would first like to thank you for what you have done for this union. We are only as strong as our members, and I am so humbled to represent you. We have a big task ahead of us, but I am confident that we will succeed.
“In my first message, I said that I would communicate with you and keep you updated on major initiatives. The International Executive Board entrusted me to take this union forward and address the misconduct that has come to light, and I take that charge very seriously. I know you do, too. Our members are the backbone of this institution, and I want you to know that I value each and every one of you and I need your help to take this union forward.
“In my first week as Acting President, I said that I would move swiftly to enact reforms that would strengthen this union and our resolve to move forward with a commitment to ethical reforms, transparency, and accountability. And with the support of the International Executive Board, I’ve done just that. So, let me outline our first reforms and actions on behalf of this union, our members and our staff.
“I do this on behalf of all of our members and I say this here: I need your help and support. And I welcome your feedback.
“Here are our initial reforms:
- Establishment of a UAW Ethics Officer – The establishment of an Ethics Officer who will not be an employee of the International Union, but rather an external position to investigate allegations, complaints or matters referred to them by the Ethics Ombudsman or IEB. To that end, we are beginning a national search for an Ethics Officer immediately.
- Establishment of an Ethics Ombudsman – The establishment of an Ethics Ombudsman to receive, review and respond to ethics complaints and allegations.
- Establishment of an Ethics Hotline – The UAW will set up an Ethics Hotline to encourage those who may have concerns about or want to bring attention to potential ethics violations. The hotline will provide members and employees the ability to anonymously and confidentially submit allegations or complaints about potential violations of the UAW’s Ethical Code and other relevant policies.
- Policy for Recovery of Misuse of Funds – The introduction of a new policy that will enhance enforcement against those who have been found guilty of misusing funds and our commitment to seek recovery of all misused or misappropriated funds.
- Accounting Policy – The implementation of stringent monetary controls that increase oversight by the UAW Accounting Department over the finances of our union.
- Charitable Contributions – The banning of all charitable contributions from UAW joint program centers, vendors, or employers to any charities run or controlled by UAW officials.
- Joint Programs – The enactment of accountability measures to the Joint Programs, including that purchases of promotional items using joint program funds have been permanently banned and all expenditures will be controlled, monitored, and regularly audited by independent public accounting firms.
In regard to Cabin Four at Black Lake:
We intend to sell Cabin Four at Black Lake. Cabin Four and its related property at the UAW’s Walter and May Reuther Family Education Center will be put up for sale.”