Re: US:Ford workers narrowly OK health-care deal
Health giveback ekes by at Ford
Just 51% of workers OK deal to use portion of future pay hikes to fund retirees' medical care.
Bryce G. Hoffman and David Shepardson / The Detroit News
Ford Motor Co.'s blue-collar workers narrowly approved an agreement between the company and the United Auto Workers that will raise health care costs for active employees and retirees.
Only 51 percent of Ford's UAW members voted to ratify the deal, while a similar agreement between the UAW and General Motors Corp. passed by 61 percent in November.
A federal judge gave preliminary approval for the GM-UAW deal Thursday. The UAW-Ford agreement also will need court approval.
The paper-thin margin reveals a growing rank-and-file resistance to UAW President Ron Gettelfinger's strategy of cooperating with American automakers to rein in costs in the face of fierce foreign competition.
The union is negotiating a similar deal with DaimlerChrysler AG's Chrysler Group that also will have to be ratified by workers.
With workers growing weary of givebacks, Gettelfinger will be hard-pressed to offer major concessions to Detroit's automakers during the 2007 contract talks.
Many Ford workers who opposed the health care agreement objected to increases for retirees.
"The membership wanted to leave the retirees alone," said Local 249 President Jim Stoufer. "They paid the price with the strikes over the years."
Stoufer represents workers at Ford's Kansas City Assembly factory in Missouri, where most of the workers rejected the deal.
The agreement requires tens of thousands of retired hourly workers to pay monthly health insurance premiums and deductibles that could total up to $370 a year for individuals and $752 for a family. Most retirees or their surviving dependents who receive pensions of less than $8,000 will not have to pay the new fees.
Ford's 87,000 active workers will not have to pay these fees, but will see higher co-pays for prescription drugs. In addition, they will be required to divert 17 cents of future quarterly cost-of-living raises and a 3 percent wage increase that had been scheduled for September 2006 into a fund to help pay for retiree health care. The average worker will give up 99 cents an hour in wage increases -- about $2,000 a year. Ford provides health care to about 355,000 UAW workers, retirees and their dependents.
A majority of workers at Ford's manufacturing operations in Louisville, Ky., St. Paul, Minn., and Chicago also rejected the deal, according to union officials.
Rocky Comito, president of Local 862 in Louisville, said he and other union officials had little time to explain the agreement to workers.
The union announced the tentative agreement Dec. 14 and workers in Louisville were asked to vote on it Dec. 18.
"People were just aggravated and said we are trying to force it down their throats," Comito said, adding that he thought the concessions were necessary to protect jobs. "If it's going to secure everybody's future, it's the right thing to do."
Ford, which lost $1.2 billion pretax in the third quarter, plans to announce major job cuts and plant closings next month.
The deal is expected to translate into an annual pretax savings of about $650 million for Ford. That represents a cash savings of about $200 million each year, the company said. The deal also will boost Ford's balance sheet by reducing its retiree health care liability by an estimated $5 billion.
The UAW had said the agreement would save Ford $850 million a year.
Some workers questioned how the vote was conducted. "There were voting irregularities," said Ron Lare, who works at the Rouge complex and is a member of UAW Local 600.
Instead of setting up polling stations as they do during local elections, Lare said union officials walked the assembly line with 5-gallon buckets collecting ballots. He said union leaders pressured workers to support the agreement because they see it as the only option, given the financial challenges facing Ford.
"They don't know what else to do," Lare said. "They've decided they're not going to fight."
Other workers echoed Lare's concerns, but said they were afraid to speak out publicly.
The UAW would not comment on the vote.
Industry observers say the close count demonstrates the challenges facing UAW President Ron Gettelfinger today, and predict he will have an even harder time selling a similar deal that is expected to be announced between the union and DaimlerChrysler AG.
"Gettelfinger is in a very tough spot. He's walking a very fine line," said David Cole, chairman of the Center for Automotive Research in Ann Arbor.
Meanwhile, U.S. District Judge Robert H. Cleland gave preliminary approval to a similar agreement between the UAW and GM on Thursday. The judge asked how "anyone in his right mind" could oppose the deal and said the sides had "more than adequately" demonstrated the need for the concessions.
UAW attorney Julia Penny Clark explained in stark terms why active employees gave up $2,000 a year in raises and single retirees will see their health costs rise as much as $370 a year. "To paraphrase an old fable: A dead goose doesn't lay any eggs," Clark told the judge.
GM attorney Eugene Driker emphasized that the additional costs to retirees are modest.
"If the retirees have had health benefits that are the equivalent of a fully loaded Cadillac, they now have a Cadillac without heated seats," Driker said.
Cleland ordered the details of the agreement mailed to all of GM's UAW-represented retirees and their survivors, giving them until Feb. 13 to file any objections. Cleland will hold a hearing March 6 to decide whether to formally approve the deal between the union and GM.
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.
My next Ford.....