UAW loses ‘equality of sacrifice’ grievance against Ford

UAW loses ‘equality of sacrifice’ grievance against Ford
Nick Bunkley — Follow Nick on
Automotive News | July 19, 2012 – 11:38 am EST
UPDATED: 7/19/12 2:15 pm ET – More details added

DETROIT — An arbitrator today dismissed the UAW’s long-standing “equality of sacrifice” grievance against Ford Motor Co., ruling that Ford was not contractually obligated to roll back concessions with hourly workers at the same time it restored bonuses for salaried employees.

More than 35,000 of Ford’s 41,000 U.S. hourly workers signed onto the complaint, which was filed in 2010 after the company reinstated merit pay increases and retirement-plan contributions for salaried workers.

The arbitrator, David Grissom, wrote that “no written agreements resulted from negotiations or otherwise which precluded Ford from providing 2010 merit increases and a partial 401K match to its salaried workforce.”

Although the grievance became a rallying point for factory workers during Ford’s turnaround, labor experts hadquestioned whether the union would prevail. The complaint stemmed from the same bitterness that was behind UAW President Bob King’s crusade against executive bonuses; King once called Ford CEO Alan Mulally’s compensation “morally wrong.”

“A huge majority of workers had signed onto this,” said Kristin Dziczek, director of the Labor & Industry Group at the Center for Automotive Research in Ann Arbor, Mich. “I’m sure it’s more than disappointing for the people who were expecting this to come out a different way.”


The grievance went to arbitration last fall as Ford and the UAW hammered out a new four-year labor contract covering wages and benefits.

The UAW argued that by restoring cuts made to salaried workers, Ford violated the equality of sacrifice principle of its labor agreement. That language was not carried over into the contract that the union ratified in October.

“We are pleased with the decision and respect the grievance process as a longstanding and effective way to work through issues,” Ford said in a statement. “More importantly, we look forward to continuing to work with the UAW as we together create the great products, strong business and contributions to a better world that will continue to deliver profitable growth for all.”

In his 30-page opinion, Grissom said King claimed Ford officials had verbally promised not to give bonuses to salaried workers in 2010. He said such a promise would be irrelevant because it was not specifically stated in the written contract, a principle known as the Parol Evidence Rule.

“The evidence establishes that no such promise was made,” Grissom wrote. “But even if some form of a verbal/oral commitment came from a Ford negotiator with the authority to do so (which, again did not occur), that alleged promise would run counter to the Parol Evidence Rule not to mention the patent implausibility of experienced negotiators leaving a subject of such indispensable importance (merit increases/401Ks for 2010) to words or even the proverbial ‘handshake.’ Frankly, this notion is near preposterous.”

Profit-sharing over wage hikes

Ford has not raised wages for hourly workers since 2003, though the new contract, combined with the company’s improved finances, has increased profit-sharing bonuses. Eligible Ford hourly workers this year received profit-sharing checks averaging $6,200, the most since 1999.

Workers at Ford, which avoided bankruptcy, received a more lucrative deal than did their counterparts at General Motors and Chrysler, but they were hoping to receive additional compensation if the union prevailed with the grievance.

Officials from the UAW were not immediately available for comment.

King has said hourly workers each gave up pay and benefits worth $7,000 to $30,000 during the industry’s downturn. Hourly workers at each of the Detroit 3 agreed to forgo raises, bonuses and cost-of-living adjustments to help the automakers survive.

“When there’s equality of sacrifice, there’s got to be equality of gain,” King said in 2010. “We just want to make sure when things turn around we share in the upside.”

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