UAW now faces the Ford Challenge

The United Auto Worker Union had proven might with their labor force as they kicked off two strikes and a series of bargaining with America`s largest automakers. The union`s battle is not yet done as they are about to face their last bargaining foe, Ford Motor Co.

According to auto industry analysts, among the big three of Detroit, Ford Motor Co. is the most financially ill. Last year, America`s second biggest automaker lost about $12 billion and with the hopes of economic spin this year, it placed its assets on a mortgage for funding of its return to profit plan. The plan entails the automaker to close 16 of its plants and facilities by 2012.

The union`s national council has to persuade its members that they are going to have a good deal with Ford or else, any agreement with the automaker will be rejected. Being the first bargaining target for the negotiations, General Motors offered extensive commitments on future products in their facilities to guarantee job security. According to Erich Merkle, vice-president of auto industry forecasting for the consulting firm IRN Inc. Ford (sells original Volvo power steering pump) cannot do what GM did. Ford`s market shares have been steadily sloping down from 26 percent in early 1990s to 15 percent this year and the company is already utilizing 80 percent of its U.S. plant capacity.

“Ford has to close plants. I don`t know how Ford can provide a lot of security going forward in terms of jobs” Merkle said. “That made it difficult at Chrysler to get the contract passed, but if you think it`s a problem for Chrysler, it`s even a bigger problem for Ford.”

Last Saturday, the UAW completely ratified the Chrysler deal tallying about 56 percent of their production workers and 51 percent of the skilled workers voted for the tentative deal. The clerical and engineering workers however had higher vote margins than these workers. The deal was made after the UAW launched a six-hour strike on October 10. It was the same day that the union ratified the GM deal.

“We are pleased that our UAW employees recognize that the new agreement meets the needs of the company and its employees by providing a framework to improve our long-term manufacturing competitiveness” Tom LaSorda, Chrysler`s vice chairman and president, said in a statement. LaSorda was the company`s chief negotiator.