DETROIT — Just after workers ratified a new contract with General Motors last week, the president of the United Auto Workers union put out a statement that Ford would be next for “pattern bargaining.”
That pattern means the UAW will use the GM deal as a template in its talks with Ford, and Fiat Chrysler after that. But it could end up being a problem for both those companies.
GM gave out pay raises and a huge signing bonus, and it didn’t change the union’s top-notch health care that costs members little. In return it won millions in savings because it was able to close three factories that made slow-selling cars and parts.
Here are some questions and answers about what’s facing Ford, which began its negotiations in earnest Monday, and later Fiat Chrysler:
WHAT WILL FORD AND FIAT CHRYSLER OBJECT TO IN THE CONTRACT WITH GM?
GM agreed to raise pay of workers hired after 2007 to top production wages of over $30 per hour within four years. Those workers started around $17 per hour in a concession the union made to reduce
Ford and Fiat Chrysler also are likely to seek smaller signing bonuses than the $11,000 per worker that GM agreed to, which is expected to cost the company more than a half-billion dollars. It’s unlikely either Ford or Fiat Chrysler will be able to change 4% lump-sum payments to older workers in the first and third years of the four-year deal, and 3% pay raises in years two and four.
WHY DID GM AGREE TO THESE PAYMENTS?
The union’s 40-day strike against GM influenced the contract terms because it cost the company production of 300,000 vehicles and over $2 billion in lost profits, analysts say. But GM got some wins, mainly the ability to close three car and transmission factories in Lordstown, Ohio; Warren, Michigan; and near Baltimore. GM will build battery cells for electric vehicles at a new plant in the Lordstown area, but it will be run by a joint venture and will pay workers far less than GM pays assembly plant workers.
Art Schwartz, a former GM
CAN FORD AND FIAT CHRYSLER CHANGE THE PATTERN?
Not on most of the bigger economic items, but there can be differences. Ford may want to close some car or related transmission plants, but it won’t get close to the cost savings that GM got, said Kristin Dziczek,
GM also agreed not to change its 49,000 union workers’ health insurance, so they’ll still pay about 3% of the overall cost. Workers at most big U.S. companies pay closer to 30%.
Health care is a big reason why Detroit automakers have higher
WILL THERE BE ANOTHER STRIKE?
It largely depends on how far Ford or Fiat Chrysler want to depart from the GM agreement. “I don’t want to predict it, but it’s not off the table in any sense,” said Dziczek.
There’s also the federal corruption investigation within the UAW that has implicated the current and previous union presidents, which could test the faith of members in their leadership. That’s especially true at Fiat Chrysler, where a now-deceased UAW
Tom Krisher, The Associated Press