UAW, Ford sign contract: Spirit of cooperation praised amid concerns about economy

Bryce G. Hoffman / The Detroit News

The leaders of Ford Motor Co. and the United Auto Workers gathered Monday afternoon for a signing ceremony that made official a new national labor agreement and marked the formal conclusion of the 2007 contract negotiations between the union and Detroit's Big Three.

Both sides praised a new spirit of cooperation that they credited with producing transformational contracts that will allow Ford and the other domestic automakers to better compete with foreign car companies operating in the United States.

However, Ford executives also expressed concern about a weakening economy and suggested more cost-cutting moves may be necessary if auto sales continue to fall next year.

"We've got a very, very competitive agreement," Ford CEO Alan Mulally said. "Of course, we'll continue to look at the market and make the kind of adjustments we need to."

He said it was critical that Ford monitor customer demand for its cars and trucks and adjust its production accordingly.

But UAW President Ron Gettelfinger downplayed concerns about the U.S. auto market.

"The fact that the market is off a little bit doesn't really mean a whole lot," he said. "What's important is that we have a plan in place at Ford. We're going to move this company forward. Our union is a big part of that."

The comments came moments after the two men signed the new four-year contract between Ford and the UAW. The document also was signed by UAW Vice President Bob King, who heads the national Ford section of the union, and the automaker's executive chairman, Bill Ford Jr.

"This is an historic day for Ford," Bill Ford said, praising union leaders for their willingness to address "some very challenging issues" in this year's talks. "The teamwork was amazing, and we came up with a contract that is -- in my mind -- excellent for the employees, excellent for the retirees and great for the company."

Surrounding the table were the assembled members of the UAW's national Ford team, Ford Americas President Mark Fields and Ford's labor affairs team, headed by Joe Laymon. There was loud applause as the four signatories shook hands after the signing.

Later, the document was signed by the other representatives of the two sides.

Ceremony ends talks

Monday's ceremony took place at the same conference table where negotiations between Ford and the UAW officially began with a handshake more than four months before.

Ultimately, it was rival General Motors Corp. that the UAW chose as its strike target once the last contract expired Sept. 14.

Over the next month, Ford executives waited for their turn and watched as the union struck both GM and Chrysler LLC, briefly halting production at those companies before reaching agreements on a new national contract.

Ford managed to avoid a strike during its own negotiations with the union, which resumed after ratification of those two contracts. Ford executives also believe they were able to win more favorable contract terms from the UAW.

As at GM and Chrysler, the centerpieces of that contract were an agreement to permanently transfer responsibility for hourly retiree health care from the automaker to a union-run trust fund, and a two-tier wage deal that will allow the manufacturer to pay new hires about half what current workers make.

In exchange, Ford agreed to keep open some U.S. factories that had been targeted for closure as part of its Way Forward restructuring plan.

"What we talked about was a way to bring product back into these facilities," Gettelfinger said, adding that the new contract will allow Ford to compete with foreign rivals like Toyota Motor Corp. and Hyundai Motor Co., which have set up factories in other parts of the United States.

"We're glad to have the negotiations behind us, and we're ready to move forward We're going to come out of it a stronger and better union."

But analysts are already worried that the gains made by the Detroit automakers in this year's contract negotiations may be offset by weakening demand for their products.

Numbers released Monday show sales for the industry as a whole were down 1.6 percent in November, and all three companies are warning that next year is likely to be even worse, due to a weakening economy, tightening consumer credit and a deepening crisis in the housing industry.

"We'll continue to watch that very carefully as we move into 2008," Mulally said. "The most important thing that we do is adjust our production to match that demand."

You can reach Bryce Hoffman at (313) 222-2443 or bhoffman@detnews.com.