October 8, 2011

by Scott Houldieson

Brothers and sisters, we have a tentative agreement between Ford Motor Company and the International UAW. Look it over carefully. Does it meet your expectations? Does it meet your needs? What are the tradeoffs?

I laid out my expectations in a letter to you last month. I also made sure that your International Union Leadership understood the importance of those expectations to the membership. Virtually none of those expectations were met.

None of the concessions we accepted from the 2007 agreement, or the 2009 modifications were reversed. Why?

To keep Ford competitive? Are you kidding me!? Ford has been out front of all the other companies. How did that happen? Primarily by consolidation through plant closings. And; despite all the rhetoric about creating jobs they are still planning to close more plants. Twin Cities, and Walton Hills Stamping are still facing the axe.

If you are guaranteeing jobs why not save those UAW members and their communities. We’ve seen job guarantees before. How did those work out? Since 2007 we lost 17,000 members at Ford.

Let’s look at where the company has come since we made incredible sacrifices to get Ford through some tough times. In 2007 the two tier wage system and the VEBA were established. That was followed by a modification in February 2009 that suspended: COLA, Christmas Bonuses, a Holiday, gave up a 4% Performance Bonus & a 3% Performance Bonus and a minute of break for every hour we work.

That wasn’t enough for the greedy @$#!!@. They came back for more in October. AS we were voting to reject the second modification package we were hearing rumors that Ford was going to post a profit. The day after rejecting the second modification Ford announced a billion dollar profit for the third quarter. That’s a billion dollars in just three months!

Ford in 2009, ended the year with 2.7 billion in profits WITHOUT ANY SECOND TIER WORKERS; with the possible exception of Twin City Assembly.

Lets do the Math

In 2010 profits went into high gear. Ford made a mere 6.6 billion dollars in profits. For 2011 so far Ford has 5 billion dollars in profits. As you know hiring went into high gear near the end of 2010. Most of those profits came with a small number of temporary workers.

How much has the two tier pay scale affected profits? How much has it affected your bottom line? As of today Ford has about 2000 temporary workers at second tier wages. Second tier worker, with a starting wage of $15.50 per hour account for about $13 per hour less than a general utility or repair classified employees.

If we use a 50 hour work week paying 55 hours including overtime premium. The savings are 55 x $13 = $715 per week per employee. With 2000 second tier workers this comes to 1.43 million dollars per week, or 74.36 million dollars per year.

That sounds like a lot of money, but compared to the profits Ford has been racking up it is small. Take for example 2010. Ford made 6.6 billion dollars if they would have paid that extra money second tier workers are shorted the profits would have been only 6.525 billion dollars.

Had COLA been frozen rather than eliminated in the 2009 modification this would have cost .99 = $40,590 per hour, x 55 hours per week on average = $2.23 million per week x 52 weeks per year = $116.09 million in 2010. That would have reduced the company’s 2010 profit from $6.6 billion to $6.484 billion.

Frozen COLA and second tier wage increases would have reduced profits for 2010 to a mere $6.41 billion dollars! How is a company to survive on that?!

Signing Bonus

Where did you first hear of a signing bonus? Was it for professional athletes? That’s where I first heard of the concept. It works for pro athletes because their careers tend to be short and often end abruptly. Signing bonuses are a kind of insurance policy on their career. Any football fan knows of the horrible injury to Pro Bowl quarterback Joe Theisman. His was a relatively long career of 12 years.

Signing bonuses for auto workers have a different purpose. Many of us expect to have careers of thirty years or more. It’s more important to have a wage that keeps ahead of the pace of inflation in the long run. For auto workers a signing bonus is a bribe to entice you to swallow a contract that is harmful over the long run.

LTS vs. 2nd Tier vs. 1st Tier

Divide and conquer. Forget all the happy talk about FTPM Morale matrix. The company knows it has a better chance of controlling us if they can keep us divided. If we don’t reverse the scourge of Temporary Worker and Two Tier language the divisions will only get worse.

If LTS’s are given seniority without the removal of the LTS or TPT language and removal of the Two Tier language we will have no fewer than three tiers going forward. Divide and conquer will go into high gear. Second tier full time members will now be subject to shift bump and job bids procedure but new hires will most likely be LTS’s. This will prevent seniority employees from exercising shift preferences on those newly hired. Will the next round of LTS’s be required to sign a waiver too? If so will they then have to wait until the next contract four years from now to achieve seniority? What a hot mess that will be!

Active vs. Retired

Retirees; they are our heritage as well as our future. It is the retirees that went on strike to demand the benefits we take for granted. Very few of us will be able to continue working at these kind of physically demanding jobs into our 70’s. We all hope to reach our “Golden Years” with some kind of financial security.

When the union took over retiree health care the VEBA was projected to last 80 years. Through the 2008-2009 cycle of economic calamity, the union decided to accept stock instead of cash and less of it. This has put the VEBA in peril of running out much sooner than the 80 years promised.

This is the first contract ever that new retirees have not gotten a pension increase. You may feel bad about that for those about to retire; but then it hits you, this is a freeze on the pension of everyone that will ever retire. Even if you retire 8, 12, or 30 years from now that is an increase that will be missing.

UAW jobs used to set the standard for the middle class. They offered a model for other unions and drove the wages of non-union workers up.

Pattern bargaining Walter Reuther style chose the company where workers were in the strongest position and used the threat of a strike (and market share loss) to get the best contract then pattern the others after it. The new style of pattern bargaining is to choose the company where workers are in the weakest position and negotiate concessions then sell it to the others as a need to stay competitive.

The UAW should be in the business of keeping the middle class not destroying it!

What happens next is up to you. We will be voting on this agreement soon. I know how I will vote, not just for myself, but for the future of all my UAW brothers and sisters.

Scott Houldieson
Local 551

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