Ford-UAW contract to create new jobs, boost sales

Article by Christian A., on October 11, 2011

Ford dealers and employees are bound to benefit from the tentative contract that Ford Motor Co. has with the United Automobile Workers (UAW) union. The deal would create 5,750 hourly jobs in the United States. Ford workers would also get more money. Meanwhile, the dealers believe that the additional jobs and cash will help dealers located near Ford factory towns.

Jim Seavitt, president of Village Ford in Dearborn, Mich., said that these wages may return to the company when employees buy a Ford vehicle. Seavitt said that Ford workers comprise his core market area. He said that in the last five years, he lost about 50% of these sales. He also believes it to be an advantage that the contract was settled without a strike.

Ed Witt, owner of Witt Lincoln in San Diego, said that this means that Ford stock will go up and it will make more investments, says Autonews. Consumers will also have a better perception of Ford and Lincoln products. Ford has yet to announce the complete details of this tentative contract, which is subject to a ratification vote by the 41,000 U.S. hourly workers of Ford.

It is well-known that Ford is committed to invest $16 billion in U.S. manufacturing operations. The union said that Ford is willing to produce the next-generation Ford Fusion sedan in Flat Rock, Mich., in 2013. Ford has also agreed to add Transit Commercial Van production in Kansas City, Mo., and to move medium-sized commercial truck assembly from Mexico to Avon Lake, Ohio.

The UAW and Ford Motor Co. have reached a tentative labor agreement for the company's 41,000 U.S. workers. The deal includes no increases for senior employees and bonus payments amassing $10,000 this year. Entry-level employees, who now earn around 50 percent of the $28 wage of senior workers, gain increases that will place their hourly rate up to $19.28 by 2015, according to the UAW.

Moreover, Ford will give out $1,500 payments each year to its UAW workers, replacing cost-of-living adjustments. If the automaker earned $5 billion each year, the employees could get $20,000 in profit-sharing payments as part of the four-year agreement, the UAW explained.

The carmaker entered into the discussions in the hope of reducing labor costs, which are the highest in the industry. It also aimed to gain more parity with Chrysler Group and GM. The Center for Automotive Research in Ann Arbor, Mich., forecasts that Ford's average hourly labor costs, including wages and benefits, to be $58 in 2010, versus $49 at Chrysler and $56 at GM.

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Topics: ford, uaw, united states

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