DETROIT — UAW President Ron Gettelfinger said today that the Ford-UAW contract modifications rejected overwhelmingly by Ford’s 41,000 hourly U.S. workers would have saved the automaker just $30 million.
In a phone interview, Gettelfinger said he pushed the modest concessions to lock in future product commitments at Ford plants and to bring the Ford agreement with the UAW into pattern with union agreements with General Motors Co. and Chrysler Group.
Gettelfinger said a little-publicized provision of the modifications would have allowed the UAW to call a strike at Ford if the company failed to meet its product commitments. The UAW had no such provision to strike over product commitments in its GM and Chrysler contracts, he said.
A key reason that rank-and-file voters opposed the new concessions was wording that required binding arbitration over any bargaining impasses in the 2011 contract talks.
Gettelfinger said the UAW agreed to binding arbitration to bring the Ford contract into pattern with no-strike clauses negotiated this year with GM and Chrysler.
“In good times, you establish a pattern, and in bad times, you stay with the pattern,” Gettelfinger said.
He said he saw no long-term damage resulting from the contract rejection either to Ford or the UAW.
The UAW announced today that 70 percent of voting Ford production workers rejected the contract, while skilled trades workers turned it down by 75 percent.
Gettelfinger said that after paying each of the 41,000 hourly workers a $1,000 bonus called for in the modifications, or $41 million, the contract would have saved Ford just $30 million.
Ford spokeswoman Marcey Evans declined to comment, except to note that the rejected modifications were more about operating improvements than saving Ford money. In addition to binding arbitration, the modifications called for combining some skilled trades and a freeze on wages for entry-level workers.
Gettelfinger said the Ford product commitments, which meant job security for union workers, were airtight and approved by Ford’s board of directors.
If Ford had failed to live up to those commitments, the union had an immediate right to strike over that issue, Gettelfinger said.
The contract language also had a caveat that product commitments were subject to market demands, he acknowledged.
But “market demand” is often debatable, providing the union with the ability to strike in a close call. “It had real teeth,” Gettelfinger said.
Gettelfinger credited Ford in the negotiations with sticking to a pledge not to ask for additional concessions on retiree health care.
On Jan. 1, Ford must make a $1.9 billion payment into a UAW-administered voluntary employees’ beneficiary association, with at least $1.3 billion of the amount in cash and the rest in Ford stock. In contrast, GM negotiated a much bigger reduction in the amount it must pay in cash Jan. 1 — to $585 million.
All told, Ford must pay $6.5 billion of a $13.2 billion obligation to the VEBA in cash, while GM’s cash payment is just $2.5 billion for an obligation that was $20 billion before new concessions were negotiated just before the automaker’s bankruptcy filing June 1.
Said Gettelfinger: “Ford kept its word.”