DEARBORN, Mich. — Ford Motor Co.’s turnaround in the past five years has resulted in big profits and won its CEO a reputation for brilliant management.
But those same achievements are stirring resentment among many of its factory workers. And that is complicating contract talks between the company and its union employees.
At the Rouge, Ford’s massive, 94-year-old factory complex in Dearborn, there’s talk along the assembly lines of winning back raises and bonuses lost when the company was near financial collapse in 2007. Workers, who assemble F-150 pickup trucks at the site, are upset that Ford is trying to cut labor costs, especially after nine straight profitable quarters and a $26.5 million pay package for CEO Alan Mulally.
A few miles to the north, inside Ford’s 13-story headquarters known as the Glass House, executives are worried because workers, on average, cost the company $58 per hour in pay and benefits, the highest in U.S. auto industry.
Both sides are trying to find a compromise this week while work continues at Ford factories under a contract extension. A top union bargainer told workers on a telephone recording Monday night that talks are accelerating and he is “hopefully optimistic” a deal can be reached this week.
Ford’s profits and the possibility of a strike could force the company into a deal that is more generous to workers than the one already reached with General Motors Co.Chrysler Group LLC, meanwhile, continues to negotiate its own contract with the union.
Differences between Ford and the union date to 2007, when all three Detroit automakers were on the verge of financial ruin. The year before that, Ford lost $12.6 billion, and U.S. sales were down 8 percent. Worried that the company would collapse, Ford workers began a series of givebacks.
Like workers at GM and Chrysler, they eventually gave up cost-of-living pay raises, performance bonuses and other benefits. GM and Chrysler needed government bailouts and bankruptcy protection to stay in business, but Ford took billions in private loans and endured on its own.
As a result, Ford became a consumer favorite and the company prospered. It paid Mr. Mulally for engineering the turnaround and restored merit pay and some other benefits for white-collar workers, angering union members.
“The compensation for the CEO has been widely publicized, and those kinds of things wend their way up and down the assembly line,” said Harley Shaiken, a professor at the University of California at Berkeley and a specialist in labor issues. “It creates higher expectations.”
At Ford, bargainers are expected to use the deal with GM as a template. But it’s unclear if its provisions will be acceptable to Ford or its union workers. Under the deal, GM workers would get a $5,000 bonus for ratifying the contract, more profit sharing and higher pay for entry-level workers. Although the deal has no pay raise for most workers, it appears headed for approval.
It’s the lack of raises that has rankled many of Ford’s 41,000 factory workers.
“Ford has to do a lot more,” said Gary Walkowicz, a worker at the company’s Dearborn plant, the epicenter of union dissent.
The average hourly worker at Ford made $109,020 in 2010, including wages, benefits and overtime, up 17 percent from 1999. But the average salaried factory supervisor made $99,760 in wages and benefits, up just 2 percent in the same period, the records show.