AFSCME 3357-HOF'S BLOG

Ford UAW Workers Ratify Concessions

By a 58% majority, Ford UAW workers ratified a concessions package as a modification to their 2007 collective bargaining agreement. Base pay, healthcare benefits and pension were not reduced, but there are significant cutbacks in other areas. The jobs bank was eliminated. Laid-off workers will receive only partial pay (in addition to unemployment in most cases) on a declining basis for up to two years. Workers agreed to work 4 10 hour shifts per week without overtime. There are changes to the skilled pay classifications.

The most important provision is a change to the retiree healthcare VEBA. As I understand it, all of Ford's contributions to the VEBA going forward can be made in the form of nonvoting Ford stock. If fully funded, the VEBA would end up owning 25% of the company.

Critics have said these cutbacks are minor. I doubt that Ford workers, Ford management or the Ford family members would agree.

Chrysler and GM now face the challenge of negotiating similar or deeper cuts. It will be very hard to get the union to voluntarily take GM or Chrysler stock right now, especially without binding debt for equity deals with the other creditors.