Detroit’s weakest link comes to terms with UAW

Among the big three automakers of Detroit, Ford is considered the most financially ill and as it follow the track for its return to profitability, the United Auto Workers recently cleared its way. Last November 3, 2007, Ford Motor Co. came into terms with its labor force by coming up with a new four year deal to cover its almost 54,000 workers.

As the tentative agreement will have to undergo the rank-and-file ratification, the UAW has not yet released the specifics of the contract. However, Ford’s deal with UAW is expected to follow the pattern of the General Motors and Chrysler deal as a totality. The General Motors contract was done in September and was completely ratified in October. On the other hand, the negotiations with Chrysler ended last month and the ratification was done until last week. For Ford, the approval process is expected to begin next week.

According to Ron Gettelfinger, UAW President, the contract was reached at 3:20 am last Saturday after a two day round-the-clock negotiations.

“Our bargaining committee came through for our active and retired members,” said UAW President Ron Gettelfinger.

“We face enormous challenges and we also have enormous potential,” said UAW Vice President Bob King, who directs the union’s Ford Department. “Our goals for this contract were to win new product and investment, to enhance job security and protect seniority and we made progress in all these areas,” King said.

Since 1995, Ford Motor Co. continuously lost its market shares and last year, the automaker announced that it lost $12.6 billion. As part of its restructuring program or the “Way Forward” plan, Ford already laid-off 19,000 of its workers. The company expects that they have to return to profitability as early as 2009. As another part of the plan, Ford is expected to announce the closing of its six U.S. plants.

To generate its needed cash, Ford had been diminishing its empire significantly its Premium Automotive Group (PAG) which includes Volvo, Jaguar, Land Rover and Aston Martin. Aston Martin had already been sold for $931 million and Jaguar and Land Rover are gaining big bids from several interested car makers and private equities.

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