UAW ratifies deal with Ford

@CNNMoney October 19, 2011: 11:00 AM ET
After early opposition, 63% of the rank-and-file UAW members at Ford Motor voted for the new contract.

After early opposition, 63% of the rank-and-file UAW members at Ford Motor voted for the new contract.

NEW YORK (CNNMoney) -- Overcoming early opposition to a deal with the nation's most profitable automaker, rank and file members of the United Auto Workers union ratified a four-year deal with Ford Motor, the union announced Wednesday.

Going into this past weekend, 53% of the early rank-and-file voters at Ford had opposed the deal, raising the risk of a strike at Ford. While a rejection of the deal would not have mandated a strike, a work stoppage was one possible outcome of a no vote.

But the locals that voted over the weekend, including Local 600 which represents the largest number of Ford workers in the union, went strongly for the deal. And the final tally showed 63% in favor of the deal.

UAW President Bob King, who had warned members last week that a better deal would not be possible if they rejected the pact, acknowledging the unhappiness of many members in his statement Wednesday.

"Working people in this country are clearly frustrated about the inequity in our society. Our members at Ford are frustrated with the economy, the lack of wage increases over the years, outrageous executive compensation and the immorality of Wall Street. Through this process, we have developed open and honest debate," he said.

In March King had said that it was "morally wrong" that Ford CEO Alan Mulally received stock from the company in 2010 worth $54.5 million, by some estimates.

But King said the deal was important because it would bring back work now being done at nonunion plants in Mexico and overseas, helping the UAW recoup some of the membership it lost during downsizing by U.S. automakers in recent years.

The deal includes Ford guarantees to invest an additional $4.8 billion in new products and equipment at U.S. plants. Those promises should add almost 6,000 additional jobs at UAW-represented plants in addition to about 7,000 jobs that the company was already planning on adding.

The deal would cover 41,000 Ford members and would give veteran workers larger bonuses than workers at General Motors (GM, Fortune 500) and Chrysler. It also raises the wages for entry-level workers, but veteran workers don't get an increase in their hourly wage level.

Shares of Ford (F, Fortune 500) were higher in early trading on hopes by investors that with the vote behind it, the company may now move to reinstitute a dividend that it hasn't paid since 2006.

Kristin Dziczek, director of the labor and industry group at the Center for Automotive Research, she had gone into the weekend with serious doubts about the pact's chance for passage.

"I thought this was going to be a nail-biter," she said. But the longer the rank and file members had to consider the deal, she said, the more they realized that it was probably the best deal they were going to get, especially after the union agreed to a less lucrative deal at Chrysler Group last week.

The worsening economic environment added pressure on the union to vote in favor of the deal.

Ford was the only major U.S. automaker not to need a federal bailout and a bankruptcy reorganization in 2009, and it is the most profitable of the Detroit automakers today. To top of page

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