Ford wants to lead UAW talks to address wage disparity – Detroit Free Press
Detroit Three-UAW bargaining will begin in earnest the week of July 13 and Ford wants to be first to ink an agreement that creates a more even playing field when it comes to wages in the auto industry.
In the normally secretive world of UAW talks, key dates and details were released Monday about the next stages of bargaining leading up to the Sept. 15 expiration of the current four-year contracts that cover almost 140,000 employees.
New UAW President Dennis Williams will choose a lead company to bargain with — something not all labor leaders have done over the years — and then use that deal as a model for agreements with the other two Detroit Three companies.
On Monday top Ford and UAW officials made their first public comments about why they believe the automaker is best positioned to be the lead company and set a pattern agreement that General Motors and Fiat Chrysler Automobiles would be expected to follow. All automakers want the opportunity to set terms that favor their individual needs.
That is crucial, given the current disparity in wages that have evolved between the three companies, largely because GM and the former Chrysler negotiated special circumstances in the current contract in the wake of their bankruptcies in 2009.
Bill Dirksen, vice president of labor relations and chief negotiator for Ford, said he has never seen labor costs so divergent between the three companies. “It’s creating some relatively unique circumstances with regard to labor costs.”
The Center for Automotive Research puts Ford’s costs at $57 an hour compared with $48 an hour for FCA, which has the advantage of 40% of its workers at the lower entry-level wage of $15.78 to $19.28 an hour.
Ford also is alone in having a cap on the number of entry-level workers it can have on its roster before it has to bump the most senior workers to the senior wage of $28.50 an hour. Ford has hired about 15,000 workers since 2011, enough to hit the ceiling which started increasing some workers’ wages.
To address wage parity, and other items on Ford’s wish list, Dirksen wants Ford to be chosen to set the terms in the all-important lead company position.
To get the most for workers on the Ford payroll and not suffer concessions imposed by the unique needs of GM or FCA, Jimmy Settles, head of the UAW Ford division, wants to be first to the table.
“I like leading. I don’t like following,” said Settles following an event Monday to celebrate the opening of the William Clay Ford Field ballpark in Detroit. UAW-Ford donated $1.8 million to remodel the community ballpark. Bill Ford and his mother Martha Firestone Ford were at the park named as a tribute to the late father and husband.
Both Dirksen and Settles say Ford has the experienced team needed to create a master agreement for workers across the U.S.
“Everybody wants to go first,” Settles said. “Experience matters and I got the most,” he said of his 12 years.
And he appreciates that the corporate executives have a lot of talks under their belts as well.
Dirksen is the senior statesman among company negotiators with the sudden departure of Al Iacobelli, FCA head negotiator, and the recent retirement of Rex Blackwell at General Motors. On the union side, Settles is the only veteran. Cindy Estrada is the new union chief for the GM talks and Norwood Jewel is the new face at the FCA talks.
“We have pretty stable leadership on both the UAW and Ford side, and we feel ready,” Dirksen said. “I think most companies most years prefer to be the lead, and we don’t see it any differently.”
Dirksen notes he is backed by a lot of executive experience because CEO Mark Fields led the Americas for years; Joe Hinrichs, who is now president of The Americas, has led UAW talks in the past; and John Fleming has overseen global manufacturing and labor affairs since 2009.
Executive Chairman Bill Ford said he has been part of company talks for decades.
“So on both sides we have experience,” Settles said.
Settles said the two sides talk on a regular basis between contracts but after the formal handshake events next month, the bargaining subcommittees will start meeting. “Then it goes non-stop.”
The handshake events start July 13, with a second company on July 14 and conclude with Ford on July 23. Ford will hold its event at the Cass Technical High School in Detroit to underscore the importance of Ford and its employees in the community.
Traditionally, the UAW chooses the lead company on Labor Day and concentrates talks with that automaker to meet the Sept. 15 deadline. The contract is extended for the other two companies as they await their turn.
Under the leadership of Ron Gettelfinger a decade ago, the UAW changed its tactic and pursued main table talks with all three companies simultaneously.
Settles said he thinks Williams will return to the practice of picking a company to set the pattern, but he does not know when the choice will be made known.
Sometimes it really pays to be first, sometimes it doesn’t, said Bill Ford, adding, “I’m not really losing a lot of sleep over it..”
Either way, the executive chairman said there should be no surprises in the talks, given the ongoing relationship between union and company.
Dirksen said Ford’s strategy will not change whether the company gets the opportunity to go first or not. He said there are many topics common among all three automakers, despite the wage differences which must be addressed.
Addressing wage tiers is one of the key issues heading into this years’s talks. While workers want to close the gap between entry-level and second workers, there has also been the suggestion that a third tier be added for jobs such as janitorial that do not involve actual car assembly.
Settles called any discussions of a third tier part of the normal posturing during negotiations.
But in his mind, a third tier is a non-starter, even though he is cognizant that the the union can’t negotiate the company out of business.
“A third tier makes no sense whatsoever,” Settles said. The UAW goal is to try to close the gap between the two tiers that already exist.
Dirksen would not say if Ford advocates more, fewer or the same number of tiers.
Settles said another reason for Ford to establish the terms of the national agreement: “we are the most productive,” he said, taking less man hours to build vehicles.
Part of the bargaining process includes negotiating future investment and jobs. In 2011, Ford promised to add 12,000 jobs over four years and has exceeded that with 15,000 added to date.
Lacey Plache, chief economist at Edmunds.com, expects the economy to remain healthy for the next three years before showing signs of weakness. Jobs will likely be added at a steady rate, but automakers will not be able to make the same promises they did in 2011 when the industry was in true rebound.
“They have less room for growth,” Plache said of promises being drafted now. Companies may not have as many goodies to give out, but the economist said automakers are enjoying profitability from the sale of trucks and SUVs which gives them more profits to invest in both people and products.
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July 13 – First UAW handshake ceremony to kick off formal negotiations. Starts with either General Motors or Fiat Chrysler Automobiles
July 14 – Second UAW handshake ceremony. With either General Motors or Fiat Chrysler Automobiles
July 23 – Final UAW handshake ceremony with Ford at Cass Technical High School
July 23 – Subcommittees now in full negotiating mode at all three companies
Sept. 7 – Labor Day. Lead company could be named.
Sept. 15 – Contracts for 140,000 auto workers expires.