October 17, 2011 / 4:00 PM / 6 years ago

UPDATE 2-Detroit contracts expose autoworkers' anger

* Ratification of Ford contract seems assured

* Mulally pay package angers workers

* Contract votes pit veteran UAW workers against new hires

By Meghana Keshavan and Bernie Woodall

WAYNE, Mich., Oct 17 (Reuters) - A bright red Ford Focus sits illuminated on a platform just outside the automaker’s Wayne, Michigan, assembly plant, a proud symbol of the company’s success in reinventing itself under Chief Executive Officer Alan Mulally.

The plant, which is just a 15-minute drive down Michigan Avenue from Ford Motor Co headquarters, has become an emblem of the automaker’s turnaround under Mulally.

So when workers at the Wayne plant voted to reject a proposed four-year contract negotiated by the United Auto Workers union, it registered as a jarring slap to the CEO’s vision for a unified company he calls “One Ford.”

“I think they’ve finally pushed us to the point that we have to do something,” said Kevin Branham, a 49-year-old metal finisher at the plant. “This vote, it’s a matter of people speaking out.”

The Ford contract seemed set for ratification after UAW leaders stepped up their lobbying for the deal. By Sunday, the “yes” votes had accounted for 62 percent of all those cast.

But the surprisingly fierce debate over proposed, four-year contracts at Ford and smaller rival Chrysler Group LLC over the past week has exposed a rift between lower-paid, entry-level workers and veterans, as well as anger over CEO pay.

The argument over wages and benefits for 67,000 unionized Ford and Chrysler autoworkers comes just two years after the Obama administration intervened to save General Motors and Chrysler from liquidation. The gratitude that many Detroit workers felt just after the bailout has given way to a frustrated sense that blue-collar workers have not shared equally in the industry’s comeback.

“There is a lot of anger at Ford right now, and also a lot of anger at the union,” said Brandon Gustafson, a 40-year-old assembly line worker at a Ford plant in Minnesota slated for closure just before Christmas.

With the national unemployment rate stuck at around 9 percent and the risk of a renewed economic downturn, UAW officials led by President Bob King have said the proposed contract is the best they can get.

Last month, General Motors workers ratified their own four-year deal by a 2-1 margin. But the debate over parallel deals at Ford, the strongest of the Detroit automakers, and Chrysler, the weakest, has turned bitter.

A final ratification vote tally is expected by Wednesday for Ford and later this month for Chrysler.


In union halls and on Facebook, UAW officials have said that rejecting the Ford contract would risk a strike, where workers would take home only $200 a week.

By contrast, the Ford contract would give workers $16,000 in bonuses over four years, including $6,000 at ratification.

Many veteran Ford production workers are unhappy with the lack of a base wage raise since 2003; they now make about $28 an hour. Mulally’s compensation, including a 2010 package worth $26.5 million, has also been a flashpoint, workers say.

“We know Ford is profitable,” said Scott Houldieson, secretary-treasurer of UAW Local 551, which represents the Ford Chicago assembly plant that makes the Explorer SUV and the Taurus sedan. “We know they are paying their executives handsomely. We know that a decent wage for us would not hurt Ford’s bottom line.”

Another sore point: Many Ford workers had hoped the contract would resolve a grievance over pay that salaried employees received, but hourly workers did not. An arbitrator is expected to decide on the issue in mid-November.

Analysts have said the contract at GM and the proposed deal with Ford would cap costs and link the pay of blue-collar workers more directly with performance. But there is a risk for investors that the kinds of deals negotiated in recent months will not hold up in 2015, when workers at GM and Chrysler will have won back the right to strike.

“Wait until 2015, when the chains come off,” one Chrysler worker wrote on the union’s Facebook page.

The undercurrent of frustration stood out at Ford’s Wayne plant, where the automaker invested $550 million for retooling at the peak of the auto industry’s crisis in 2009.

The bet at the time was that a once wildly profitable hub for full-size SUVs could be made over to produce the small Focus and a battery-powered, electric variant.

Ron Andrus, 56, a Wayne worker, said many at his plant were on edge over the prospect of a strike. “It’s all scary as to what’s going to happen,” he said.

Some union officials have suggested workers direct their anger to the national economic debate. The UAW has endorsed the Occupy Wall Street protest and helped stage an “Occupy Detroit” rally.

“The Ford workers are angry for the same reasons a lot of the people are here,” said Jaron Garza, a UAW-represented General Motors worker as he stood in a downtown Detroit park with more than 1,000 others in support of the Occupy Wall Street protesters.

“A lot of the bigger companies, banks and whatnot, have been taking, and the middle class has been bearing the brunt of the recession and the aftershocks that we are still feeling now,” Garza said. “People are angry, and they think they’ve got something coming.”

Shares of Ford were down 1.6 percent at $11.38 at midday on Monday. The stock has lost 32 percent since the start of the year. Chrysler is controlled by Fiat SpA . Shares of Fiat are down 30 percent this year.

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