Ford, UAW vote has potential to be game-changer

October 18, 2011

Ford, UAW vote has potential to be game-changer


The case for whether the New Detroit is for real, or just a repackaged version of the same ol’ dysfunctional Motor City, depends on hourly workers at Ford Motor Co.

It’s that simple.

A majority of the Dearborn automaker’s 41,000 hourly workers can vote to ratify the United Auto Workers four-year deal with the Blue Oval, as is expected as early as today. Or they can reject the agreement to create 12,000 jobs, to invest $6.3 billion in American plants and to provide members at least $16,700 each in bonuses and profit sharing.

They could blame the defeat on CEO Alan Mulally’s obese bonuses, or performance payouts to salaried employees, or their union leaders, or the fact — and it is a fact — that Ford’s hourly employees have not received a base wage increase since 2003. But I doubt the broader America outside the Detroit bubble would buy such rationalizations while millions of Americans are out of work and likely to stay that way for a long time.

The backlash would be fierce. Not because those who live and work outside southeast Michigan, Ohio, parts of Indiana and plant cities across the country are necessarily “anti-union” or “jealous” of UAW wages and benefits. But because so much of the country either doesn’t have work, or isn’t getting any kind of increase for its work or both.

Want to rekindle the rhetorical opprobrium of late 2008, when Detroit’s three CEOs and the president of the UAW sat before Congress and begged for bailouts? Want to see the union’s popularity tank quicker than a Republican backing a tax increase? Want to see Detroit’s improving image and the UAW’s hopes of organizing foreign-owned rivals operating down South evaporate?

Rejecting the UAW-Ford deal, the richest of the union’s three agreements with Detroit’s automakers, would deliver all of those and so much more. For what — to remind whoever’s bothering to pay attention that the UAW still can raise a ruckus, to expose as calculating puffery the union leadership’s promise to keep its companies competitive? Why?

Ford carries more debt than its domestic rivals, and this tentative agreement doesn’t materially change that. Ford pays its hourly workers more in wages and benefits than any automaker operating in the United States, and this agreement doesn’t change that, either. Ford’s profit-sharing payout for the first half of this year would be paid sooner than its rivals.

Meaning, comparatively speaking, that Ford’s rank-and-file has it better now and would have it better under the new agreement than their competitors across town and across the country — however shrill and self-absorbed some UAW-Ford members sound in news accounts or on cringe-inducing message boards.

Pining for a return of the good ol’ days, a running theme among the deal’s critics, is the automotive equivalent of tilting at windmills — it ain’t gonna happen. The economics of the global industry, the post-bailout-turned-presidential politics and the changing demographics of the nation won’t allow it.

Nor does history. Just because the postwar years delivered unparalleled prosperity to a burgeoning middle class is no guarantee that the markers of that life will keep improving arithmetically. A lesson of the past three years in this town is that no institution, however powerful and allegedly wise, can deny market forces and general business principles in perpetuity (or until the next contract).

More precisely, how would it benefit the rank-and-file to make Ford less competitive with its rivals, to push fixed costs higher, to delay the automaker’s return to investment grade status and its plans to renew dividend payments to shareholders? Beyond the fattening of base wages now to the detriment of long-term fixed costs, the answer is simple: it wouldn’t.

UAW members are critical players in Ford’s turnaround. They build the cars and trucks credited with helping to drive the Blue Oval renaissance. They deserve credit for helping to bolster quality, profitability and competitiveness.

And they’re invested in Ford’s success. Whether they back a controversial contract will say a lot about how enduring their work really is.

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