Friday, October 23, 2009
Ford; Independent, American and determined to stay that way !
Ford's UAW members are currently voting on modifications to the contract that they ratified in 2007. Why is it necessary to "modify" a contract that has already been modified ? Because the other 2 domestic automakers, who are Ford's primary competitors, declared bankruptcy earlier this year. When in bankruptcy, they were able to shed billions of dollars in debt and reduce their future labor costs by freezing new hire wages.
In order for Ford to remain cost-competitive, we must agree to the labor cost reductions that Chrysler and General Motors were able to achieve when they went through bankruptcy. Oh sure, we could resist these competitive modifications, but we would be putting ourselves right back in the position we were in 5 years ago with Toyota and Honda.
The UAW leadership did not serve us well by not allowing modifications to our benefits package to keep us "cost-competitive" with the Japanese "transplants". The UAW challenged the Japanese to "build vehicles here if they wanted to sell them here". Well, they built a few assembly plants here and then beat us at our own game !
I think what we (the UAW) should have done was to look at how the transplants made themselves more cost effective than us, and "evolved" to remain competitive here in the North American market. Trade policy is a major factor in our relative inability to compete overseas, but here in our own market it was due to our refusal to recognize what made our labor costs higher than our competitors. The UAW leadership refused to change the "30 and out" lifetime pensions it had negotiated. 401k type retirement plans are MUCH more cost effective and would have allowed the domestic auto companies to significantly reduce their "legacy costs".
Fortunately at Ford it is not to late to recover, but we cannot allow this opportunity to slip past. We must ratify these relatively minor modifications to remain competitive in the long-term. Our future depends on it !