27 October 2009

Flat Rock Mustang Plant Rejects Concessions

from Bloomberg

Ford Motor Co.’s Mustang plant in Flat Rock, Michigan, became the fifth factory to reject contract concessions the automaker is seeking to match those the United Auto Workers granted its U.S. rivals.

The vote at UAW Local 3000 was 73 percent against the concessions, said Tom Spears, the local’s president. The factory has about 2,200 employees, is jointly owned with Mazda Motor Corp. and also builds the Mazda6.

“There are concerns about our plant’s future because we have no product beyond 2011,” Spears, who backed the contract changes, said in an interview. “The membership did not have a warm reception to additional contract modifications. We did this in ‘05, ‘07 and in February and now they’re back at us again.”

Ford, the only major U.S. automaker to avoid bankruptcy, won support from UAW local leaders Oct. 13 on an agreement to grant concessions similar to those given to General Motors Co. and Chrysler Group LLC. The changes include a six-year ban on some strikes and a freeze on wages of new hires until 2015.

Labor costs at Ford aren’t uncompetitive with its U.S. rivals in the “near term,” Mark Fields, the company’s president of the Americas, said on Bloomberg Television. The automaker is concerned about the longer term, he said.

‘Open’ Relations

Ford’s relations with the UAW “are very open and transparent,” said Fields, who declined to comment on the ratification vote. “We share with them the challenges of the business and we focus the majority of our discussions on keeping Ford competitive.”

Since Dearborn, Michigan-based Ford’s 41,000 U.S. hourly workers began voting Oct. 22, five plants representing about 10,170 workers have turned down the givebacks. An axle factory in Sterling Heights, Michigan, rejected it yesterday by 71 percent, said Brian Pannebecker, a production worker who voted for the revisions.

“People don’t understand the relationship between job security and competition in our labor costs,” Pannebecker said in an interview. “People are starting to want to buy a Ford product because we’re making it on our own without government help. Now we’re turning back the clock and making ourselves less competitive than GM and Chrysler.”

Workers at a Ford Escape factory near Kansas City, Missouri, voted 92 percent against the concessions on Oct. 25. A transmission plant in Livonia, Michigan, and a parts factory in Plymouth, Michigan, also rejected the contract revisions, union officials said. Factories in Cleveland and Wayne, Michigan, representing about 4,770 workers, have approved the changes, union officials said.

Voting concludes Oct. 31.

Bonus Offer

The automaker is offering workers a $1,000 bonus tied to quality and productivity targets and pledges of new production at some factories to help win approval of the deal. The Flat Rock plant was promised continued Mustang production only “through the current life cycle,” which ends in 2011, according to UAW highlights of the agreement.

UAW spokesman Roger Kerson didn’t immediately respond to a telephone call and e-mail seeking comment.

The concessions are the second round of givebacks sought by the automaker this year. In March, 59 percent of production workers and 58 percent of skilled-trades employees approved concessions that included giving up annual bonuses and cost-of- living increases and some layoff benefits.

Ford fell 4 cents to $7.43 at 3:03 p.m. in New York Stock Exchange composite trading. The shares have more than tripled this year.

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