OPINION:
The good news in the domestic auto industry is that Ford Motor Co. posted a $1 billion profit for the third quarter this year. After 17 straight quarters of red ink, any profit is a sign of progress. Ford sales were up 3.3 percent last month compared to October 2008 (contrasted to Chrysler, which saw sales plummet 30.4 percent year-to-year), market share is increasing, quality has improved to Japanese standards and the blue oval has a new fleet of attractive models hitting showrooms.
The bad news is that the United Auto Workers has decided to punish Ford for its success.
In results announced on Monday, more than 70 percent of Ford’s UAW members voted against concessions negotiated between its own leadership and corporate management. The amendment to the 2007 labor contract would have merely allowed Ford to take advantage of the same labor practices that cross-town rivals General Motors Corp. and Chrysler worked out in bankruptcy. Neither wage nor benefit cuts were involved. The new agreement simply would have instituted a pay freeze for new hires, reorganized job classifications and put in place a limited no-strike clause to give Ford breathing room to weather the current recession.
Rejecting this agreement breaks the six-decade-old practice of pattern bargaining in which any labor agreement negotiated with one domestic automaker was used as the pattern for contracts with the other companies. First utilized in 1950, pattern bargaining provided wage parity in the industry and guaranteed that the unions couldn’t strike against all three automakers at once and shut down the whole industry. To establish a pattern, only one company would be targeted for walkouts. The UAW’s abandonment of pattern bargaining spells big trouble ahead for Ford.
What’s new in Detroit is that the government has a stake in two out of three domestic automakers. It is a little-known detail of the government bailout of GM and Chrysler that a ban on the ability of workers to strike was a condition to receive federal largesse. Because Ford decided not to take a government handout and instead is working on a turnaround through private lenders the good old-fashioned capitalistic way, the Dearborn, Mich., company is the only member of the Big Three that can be targeted for a strike. Chairman William Clay Ford Jr. - the great-grandson of Henry Ford who founded the company 106 years ago - and his leadership team better buckle up because they are on a collision course with the UAW when the current contract expires in two years.
Make no mistake about it: Ford is being punished for refusing to take a government bailout. GM and Chrysler, which became wards of the state and the union through bankruptcy, not only were relieved of debts they owed to other corporations but also enjoy government-sponsored protection from Big Labor. The UAW spent more than $4.4 million to get Barack Obama elected president, according to the Center for Responsive Politics. Ford is still run by the Ford family - not the Obama administration - and the union is making the company pay for that.
