DETROIT (Reuters) - The United Auto Workers union overwhelmingly rejected a proposed cost-cutting deal with Ford Motor Co F.N on Monday, delivering a setback for the automaker as it seeks to bring down labor costs in line with U.S. rivals.
The UAW said that 70 percent of production workers and 75 percent of skilled trade workers voted to reject a proposed agreement the union leadership and Ford negotiated in October to change the 2007 four-year contract.
The deal would have brought the automaker's labor costs in line with General Motors Co GM.UL and Chrysler Group LLC, both of which won additional concessions as part of their government-financed bankruptcies.
UAW President Ron Gettelfinger said in a statement the union’s past concessions have positioned Ford to be a strong competitor in a tough market and its surprise quarterly net profit announced early on Monday provided further evidence of the contributions the workers have made.
“While we will not be returning to the bargaining table, our ... membership will continue to work with Ford on a daily basis in an effort to keep new products coming into our plants,” Gettelfinger said.
Analysts said that the relative health of Ford compared with domestic rivals GM and Chrysler was a key factor in the rejection of the proposed terms, but Gettelfinger said that was not a factor.
The UAW represents about 41,000 U.S. factory workers at Ford.
The current contract expires in 2011.
Gettelfinger said last Friday that there was no need to return to the negotiating table with Ford until 2011.
In a statement issued after the UAW announcement, Ford said it was “disappointed that the additional changes were not ratified.”
Ford said it wanted to keep the tradition of “pattern bargaining,” in which the UAW and the automakers maintain similar contracts among major automakers that do not favor one over the other.
Ford, like the UAW, said it will continue an ongoing dialogue on the major issues between automaker and the union that represents its workers.
“Moving forward, we will work with the UAW to discuss the next steps to ensure Ford remains competitive so we can continue to make product commitments and invest in our manufacturing facilities here in the United States,” Ford said.
The proposals rejected by workers included a “no-strike” provision on wages and benefits that became a lightning rod for opposition.
The contract would have given workers a one-time bonus of $1,000 to be paid in March 2010. That would have cost Ford $41 million.
It would have frozen wages of entry-level workers who are hired at $14 per hour. And it would not set a cap on the number of entry-level workers Ford could hire until 2015.
Over the weekend, the Canadian Auto Workers union voted 83 percent in favor of a separate agreement with Ford that freezes wages for about 7,000 workers into September 2012 in return for protecting most factory jobs in Canada.
About 10 percent of Ford’s North American output comes from its plants in Canada.
Reporting by Soyoung Kim and Bernie Woodall; editing by Bernard Orr and Matthew Lewis
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