Gettelfinger Discusses UAW's Rejection of Ford Contract

This morning in a First on Fox Business I spoke to Ron Gettelfinger ,the UAW (United Auto Workers) president, about the UAW's vote against a deal with Ford. As you may recall on October 14th in a blog entitled, "Gettelfinger on Details of the UAW's Contract with Ford," I called the deal "lousy" for Ford UAW workers. Gettelfinger understandingly took some offense to that notion, saying, "I don't know exactly where you're coming from on that, Alexis. To us, this is a win-win for the company as well as for the workers."

This morning, Gettelfinger kindly accepted my request to return and explain why the deal failed. As many as 70% of the production membership and 75% of the skilled trade members voted against the agreement. I replayed his "win win" prediction just 3 weeks ago. His response:

"A gratification process is political as you know. We did not do a good job of selling it to our membership. We underestimated the fatigue if you will of the people constantly having to make a decision on a contract. But look, this was not a concessionary agreement and it was a win-win. It was a win for us and a win for the company. We had product commitments long term which would give us longer term job security. The people saw the three things in that agreement that bothered them. One was limited arbitration on wage and benefit improvements only and then mechanical skill traits teams and changes in the entry level, which would have put them on par with GM and Chrysler. But we overlooked and we were unable to convince our membership that this was in their best interest. But look, membership is the highest authority in our union, they have the final say and we respect that and we accept that. Having said that, Ford workers are going to continue to work very hard with Ford to make sure that they maintain the momentum that they have going because our membership wants this company to be profitable. If you go back and look at part of the reason for that it’s because the men and the women of the UAW have stood up repeatedly. If you put this in dollars and cents from a monetary standpoint, this means very little to Ford. Going forward it would have meant more to them, but compared to what we did, nearly ½ a billion dollars in Febuary 15, this was more just aligning the contract. But I got to say this. The MOA or the modern operating agreements that many many, infact most all of Ford locations have in place now, is also something that wasn’t in place at the other companies and a company come out ahead on. Our membership is working very very hard with Ford. If you look at their quality, if you look at their productivity. And this is just one little place in the road. We’ll move forward. It will not be an issue."

One thing is crystal clear: the UAW needs the commitment from Ford on new product development and Ford needs a deal similar to GM and Chrysler to remain competitive. The problem for Ford is that the UAW has already made enormous concessions. A freeze or cap on entry-level wages and the failure to strike on wages and benefits caps the upside for all Ford UAW workers. Would you want your compensation capped through the end of 2011? Would you do that knowing that Ford has returned to profitability? Did you see Ford's better than expected guidance through 2011? At the end of the day they'll ratify an agreement. The question is who will get the upper hand.