UAW members at Ford ratified the deal with narrow approval rates of 51.3 percent of production workers and 52.4 percent of those in skilled traders, the union has said.
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The new contract gives raises to all of Ford’s 53,000 USA hourly workers and eliminates a two-tier wage system at its plants over eight years.
Ford also said the new agreement “significantly enhances” its ability to use lower-cost, temporary employees.
The company also has committed to investing $9 billion in its USA plants and expects to create or secure 8,500 hourly U.S.jobs in communities across Michigan, Illinois, Kentucky, Missouri, New York and Ohio.
But the company says the deal with the United Auto Workers limits labor cost increases to 1.5 percent per year and is consistent with its full-year financial guidance.
Kristin Dziczek, director of the industry and labor group at the Center for Automotive Research, has calculated that labor costs per vehicle at Ford will rise about $200 per vehicle to $2,401 and hourly costs will increase from $57 to $60.
Ford said the deal “effectively closes the labor cost gap to General Motors and substantially narrows the gap to Fiat Chrysler Automobiles”.
The labor cost gap of $8 to $10 per hour will allow automakers such as Toyota Motor Corp, Honda Motor Co, Nissan Motors Co and Hyundai Motor Co to offer more attractive options while keeping vehicle prices competitive with the Detroit Three automakers, or charge less for their vehicles. The dollar cost will match GM’s, which climbs 9 percent from $55, and will top Fiat Chrysler’s, which will rise 19 percent to $56 from $47, according to their analysis. Those calculations don’t include profit-sharing, which totaled more than $30,000 a worker during the past four years.
It’s the first wage increase for workers hired before 2007 in 10 years, and it gives workers hired after 2007 a path to traditional wages.
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“At the end of the day, we have a contract that works for our employees and allows our UAW workers to continue to share in the success of the company”, he said.
