Ford, union agree to labor pact

By John Porretto
Associated Press

United Auto Workers president Ron Gettelfinger, left, and Ford Motor Company president and CEO Bill Ford Jr. announced a tentative contract agreement yesterday at Ford's world headquarters in Dearborn, Mich. Associated Press

Details were not being released about tentative agreements with Ford and an agreement announced earlier with Chrysler.

But Knight-Ridder News Service reported the Chrysler deal includes a $3,000 signing bonus, no wage increase above cost-of-living adjustment in the first year, an increase in prescription-drug co-payments and the ability to close or sell several parts plants.

Union representatives had told members earlier they were close to new labor agreements with Ford and GM, but said difficult issues remained.

"We're proud of the agreement, and we're satisfied that it's a good agreement that addresses the needs of our membership," said UAW President Ron Gettelfinger at a media briefing at Ford's headquarters in this Detroit suburb.

"It was a long set of negotiations, but well worth it, and I'm very proud of our entire team," said Bill Ford Jr., chairman and chief executive of Ford. "They did a wonderful job."

The union and DaimlerChrysler AG's Chrysler Group announced early yesterday, just after midnight, that they had reached a tentative, four-year contract deal.

The Big Three and UAW began labor negotiations on new contracts in mid-July, but GM and Ford were unable to reach resolutions before the contracts' Sunday midnight deadline. The union, Ford and Visteon had agreed to a three-day extension to keep negotiating.

The union has said GM workers will report to work as usual while negotiations continue. The UAW had hoped to reach simultaneous pacts with the Big Three as well as Visteon and supplier Delphi Corp.

Early yesterday, Gettelfinger said the Chrysler deal contains what the union hopes to see in the other contracts. The pact covers wages and benefits for 63,000 active workers and another 66,000 retirees and surviving spouses.

The Ford agreement covers about 93,000 active workers and another 105,000 retirees.

The UAW and the Big Three, along with Delphi and Visteon, have been meeting since mid-July, sometimes late into the night, negotiating on issues such as wages, jobs, healthcare and pensions that affect 300,000 workers and nearly a half-million retirees and their spouses.

Some analysts and labor experts have said the new pacts likely would reflect the automakers' difficult predicaments and that compromise in areas such as wage and pension increases was likely.

Gettelfinger has insisted the union will not retreat on healthcare benefits, so some analysts said negotiators were likely to reach agreements that would give automakers more flexibility in plant closings in exchange for continued low-cost medical coverage.

Yesterday, Goldman Sachs analyst Gary Lapidus predicted the would-be model Chrysler pact is largely "status quo."

"Labor likely gives up job protection for the union, but in return maintains gold-plated benefits and job security for the existing actives and retirees," Lapidus wrote in a research report.

"In return, the automakers can increase productivity by 'riding the labor attrition curve' and can close selected plants as able through regular and approved early retirement programs," he said.

The current contracts were negotiated in 1999 under Gettelfinger's predecessor, Stephen Yokich, who died last year shortly after retirement. They included 3 percent annual pay raises, a ban on plant closings and nearly cost-free healthcare.

GM shares were off 28 cents in trading yesterday on the New York Stock Exchange, closing at $41.25. Ford shares were down 23 cents to $11.37, and DaimlerChrysler's U.S. shares fell 19 cents to $37.73.

Knight-Ridder News Service contributed to this report.