Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, September 17, 1993 TAG: 9309170116
SECTION: BUSINESS PAGE: A-9 EDITION: METRO
SOURCE: The New York Times
DATELINE: DETROIT LENGTH: Medium
The few changes appeared more likely to benefit Ford than the industry's ailing giant, General Motors Corp., with which the UAW will seek a similar agreement in coming weeks.
A last push by Ford to reduce health benefits finally collapsed in an exhausting, 40-hour bargaining session that lasted through the Tuesday night strike deadline. In the end, the union also forced Ford to jettison another big change, extending the life of the The UAW is likely to take the contract to Chrysler Corp. next. Locking up agreements with two automakers would give it greater leverage in bargaining with GM. contract to six years.
"I'm tired, but I'm satisfied that all of it's worth it," said Owen Bieber, UAW president, in announcing the agreement about midnight Wednesday.
He said the results showed the wisdom of dealing first with Ford, widely considered the healthiest automaker, to set a pattern for the rest of the industry, adding that the UAW saw no need to make exceptions for GM.
Union leaders tried to keep the deal under wraps until they present it for approval to the 200-member Ford National Bargaining Council early next week, but some details emerged Thursday.
Under the agreement, Ford will increase pensions 17 percent for workers retiring with 30 years' service. Workers retiring after 30 years would receive $2,100 a month, up from $1,800 now.
But newly hired workers will get lower pay to start and take longer to reach full wages. New workers now earn 85 percent of normal, catching up to full level over 18 months. Under the new pact, union officials said, new workers would get 70 percent, reaching full pay within three years.
In exchange, they will reach the full level of health benefits faster than they did under the old pact.
Ford failed to permanently lower the wages and benefits of newly hired workers. Nevertheless, the changes will benefit Ford, which is likely to hire thousands of workers the next three years.
But GM, rather than hiring new workers, plans to lay off thousands. In addition, it can ill afford higher pension benefits because under the old contract it already expects to have set aside $19 billion less for pensions by the end of the year than required by federal laws.
For GM, the contract is perhaps most notable for the changes it does not make. Union officials said it preserved - even improved - job security programs that maintain the wages of laid-off workers. That's a far more costly proposition at GM, which has about 20,000 idled workers, than at Ford, which has almost none.
And the high cost of health care is a greater burden at GM. The health care of UAW members adds $711 to the cost of making a car at GM. It's less than half that at Ford.
The new contract increases wages each year by about 3 percent. Under the old contract, an assembly line worker at Ford at full scale earned $17.01 an hour.
If, as expected, the contract is ratified at Ford, the UAW is likely to take it to Chrysler Corp. next. Locking up agreements with two auto makers would give it greater leverage in bargaining with GM.
by CNB