01 Nov 2009
Nov. 1 (Bloomberg) -- Ford Motor Co. hourly employees have rejected contract concessions the automaker said it needed to remain competitive with its U.S. rivals, said two people familiar with the outcome of the voting.United Auto Workers and Ford leaders have conceded the contract changes were defeated, said the people, who asked not to be identified disclosing results before they are announced tomorrow. About 75 percent of members voting nationwide rejected the deal, one of the people said. It called for a six-year ban on strikes over wages and benefits.
"It's mathematically impossible at this point for this to pass," said Gary Walkowicz, a member of the UAW bargaining committee at a Dearborn, Michigan, truck plant that rejected the deal on Oct. 30 with a 93 percent no vote. "Even if they had a 100 percent yes vote at the rest of the plants, it still wouldn't pass."
A truck plant in Louisville, Kentucky, rejected the deal by 84 percent the same day and a Michigan engine factory also turned it down, Walkowicz said. An Ohio assembly plant voted yesterday and another Michigan factory votes today. The UAW, which represents 41,000 Ford workers, is scheduled to announce a final vote tomorrow.
Ford, the only major U.S. automaker to avoid bankruptcy this year, sought concessions similar to those secured by General Motors Co. and Chrysler Group LLC. It's unclear what will become of the work Ford promised that would create or preserve 6,000 UAW jobs, said one of the people. The deal also had a $1,000 bonus and a wage freeze for new hires until 2015.
No-Confidence Vote
A revote is not a likely option because the deal was rejected by such a large margin, that person said.
"This never happens. It's a vote of no confidence in the bargaining committee and a vote of no confidence in Ford," said Gary Chaison, a labor professor at Clark University in Worcester, Massachusetts. "To reject a collective agreement at a time of economic difficulty is really a sign of desperation and anger."
A phone call and e-mail to Roger Kerson, a UAW spokesman, weren't returned.
"We are not commenting until the UAW announces the final results," said Marcey Evans, a Ford spokeswoman.
Ford has said it needs the concessions to ensure that it doesn't have a labor-cost disadvantage against GM and Chrysler, which unloaded debt, closed plants and eliminated dealership contracts in their court restructurings.
Ford may punish the UAW by making promised products in Canada or Mexico instead of the U.S., said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Michigan.
"Where we will see the result of this failure is in a product announcement -- moving some business out that had been planned here," he said.
Ford fell 30 cents, or 4.1 percent, to $7 on Oct. 30 in New York Stock Exchange composite trading. The shares have declined 2.9 percent since the end of September after more than tripling this year.
