DEARBORN – United Auto Workers union President Ron Gettelfinger doesn’t rule out a strike against Ford Motor Co. should the auto maker and union fail to reach an agreement, but both sides suggest use of such a negotiating tactic is highly unlikely.
Still, considering the UAW represents 58,300 Ford hourly workers and has a strike fund approaching $1 billion, Ford negotiators are all too aware of what a strike could do to the already financially unstable company.
“They’re (UAW) sitting on a $900 million-plus strike fund that under ordinary circumstances would frighten the living heck out of most companies,” Joe Laymon, Ford group vice president-corporate human resources and labor affairs, says following the official ceremonial handshake opening the 2007 labor talks.
“It does not frighten us, because we believe we can work with the UAW and come to an understanding short of an impasse,” he says.
Laymon points to negotiations Ford has had with the UAW since 2003, including an agreement to shed 27,000 workers and shutter of 16 facilities as part of the auto maker’s Way Forward North American restructuring strategy, as proof the two entities will be able to hammer out a mutually beneficial labor agreement without a strike.
To date, Ford has closed assembly plants in St. Louis, Atlanta and Wixom, MI. Next year it plans to mothball Twin Cities Assembly in Minnesota and Batavia Transmission and Maumee Stamping in Ohio.
Despite the progress made and optimistic tone regarding Ford’s relationship with the UAW, Laymon says there is still much to be done to restore Ford to profitability.
“The harsh reality is even with all the progress we’ve made, there’s still a lot to get done during these negotiations,” he says. “And that’s what we’re going to be talking about over the next few weeks.”
Of the U.S. Big Three, Ford widely is considered the most financially troubled, having lost $282 million in the first quarter and $12.7 billion in 2006.
To bankroll its restructuring plan, Ford last year secured $23 billion in financing by putting up nearly all of its assets, including its trademark Blue Oval corporate symbol, as collateral.
Ford financial woes won’t necessarily force the UAW to play softball with the auto maker, however. During a press conference following the official handshake, Gettelfinger questions Ford’s current debt status.
“(I’m) not going to get into (talking about) debt,” he says. “It depends on who you talk to. And they’ve (Ford) got a lot of cash, by the way.”
During an impassioned speech, Gettelfinger says the UAW not only is fighting for its members but for the American middle classs.
“The gap between the rich and the poor continues to widen. We’re watching the evaporation of the middle classs,” he says. “We’ve lost over 3 million manufacturing jobs since President Bush has been in office. We are fighting to save the middle classs; we’re fighting for good jobs for Americans. It’s not just about us, these negotiations are about everybody.”
As with previous UAW agreements with the U.S. Big Three, Gettelfinger says he expects this one to follow a pattern format, meaning once an agreement has been hammered out with one auto maker, it will be emulated with the remaining two.
Marty Mulloy, vice president-labor affairs for Ford, says he expects Ford to be the lead, or “target” company in the negotiations, which could give it an advantage.
“The lead company would have a better opportunity to lead the discussion with the UAW to achieve objectives the company is trying to achieve,” he says.
Meanwhile, Gettelfinger calls into question the growing disparity between wages earned by hourly workers compared with executive compensation.
“Go back to 1976 and then fast-forward to today and look at how the gap has widened as far as executive compensation,” he says. “Today it’s 420 times what (the) average worker makes. Obviously, you can’t make sacrifices come from one side of the table.”
Laymon says it’s imperative Ford adequately compensate its leadership team through these trying times.
“In order to be able to attract, retain and motivate a group of leaders to lead Ford through this complex time we have to be competitive, and I think all the compensation packages that we’ve put on the table for existing officers and those we’ve recruited recently were designed around that fact,” he says.