Ford, UAW May Reach Deal Quickly, Analysts Say


Ford Motor, considered the weakest of the three U.S.-based automakers, could agree on a new contract with the United Auto Workers union fairly quickly and without the strikes that marked negotiations with General Motors and Chrysler, analysts said on Thursday.

The UAW and Chrysler reached a tentative agreement Wednesday on a four-year pact that protects wages, pensions and health care for UAW-represented Chrysler workers and retirees, ending a six-hour strike at most of the company's U.S. plants.

The agreement followed the pattern of a ground-breaking deal the UAW reached with GM last month to end a two-day nationwide strike.

"The expectation is that having agreements cemented with GM and Chrysler, that they are probably pretty far along with Ford," Fitch Ratings managing director Mark Oline said. He expects a relatively smooth path toward agreement on wages and a health-care trust.

Among the Detroit-based automakers, Ford is seen as the least capable of absorbing a costly strike. The company lost $12.6 billion last year, and lost an industry-worst $770 on every vehicle it sold worldwide.

The automaker has put up most of its automotive assets as collateral to raise $23.4 billion to fund a restructuring that includes shutting 16 plants and cutting more than 45,000 jobs.

Job guarantees and investment commitments are likely to be the real focus of Ford's talks with the UAW, Oline said.

A person familiar with the negotiations said Ford wants to see deeper cost cuts in its labor deal and is uncomfortable with the pattern set by the GM contract on job security and product commitments to U.S. plants.

A Ford spokeswoman declined to comment on the talks.

'Something a Little Special for Ford'

Dave Cole, chairman of the Center for Automotive Research, said that while he expects the UAW to sign a contract with Ford broadly similar to those with GM and Chrysler, there could be some changes because of Ford's precarious finances.

"Ford going last is a function of their problems and that (the UAW) may have to do something a little special for Ford," Cole said.

He does not expect the union to strike Ford.

"I think the employees at Ford are ready to do something without a strike," he said.

UAW President Ron Gettelfinger said in an interview on WJR radio in Detroit on Thursday that he aimed to avoid a strike and expects to reach a deal with Ford that follows the basic framework set by the agreements with GM and Chrysler.

"I'm hoping that we can go to Ford and come out of there with a tentative agreement without having any kind of an altercation and just move forward," Gettelfinger said.

He said the UAW had made a lot of progress with Ford already.

"I'm looking forward to going to Ford," Gettelfinger said. "Ford understands pattern bargaining."

He also said Ford Chairman Bill Ford Jr. said publicly in a recent media event in Chicago that the company can work with the contract patterned with GM.

Ford has about 58,300 active UAW workers and 94,824 retirees. The UAW indefinitely extended its previous labor contracts with Ford on September 13 to focus on GM and then Chrysler.

The UAW contract talks are seen as crucial to efforts by the Detroit-based automakers to recover from combined losses of $15 billion last year and sales difficulties that have driven their share of the U.S. market below 50 percent.

The three companies say their hourly costs for the average factory worker are $30 higher than those of Toyota Motor and other Japanese automakers operating in the United States. They were seeking concessions from the UAW to help close that gap.