Tuesday, October 27, 2009
Ford workers about to throw away public "goodwill"
Ford Motor Co. is currently in the process of trying to get their 41,000 UAW members to ratify "modifications" to the labor contract they agreed to in 2007. Ford and the UAW agreed to modifications to this contract once already this year, before the bankruptcy filings of Chrysler and GM, and now they are asking for additional "modifications" to keep Ford "cost-competitive" with their domestic competitors. While UAW President Ron Gettlefinger is strongly recommending that Ford UAW members approve this contract modification, some militant UAW officials are campaigning against it. As of this moment, several locals have rejected the proposal by large margins. I'm afraid that the "herd-mentality" is taking over.
When you take a close look at the extenuating circumstances that led to this point, it is understandable that Ford Motor Company has asked the union membership to agree to additional changes in the contract. No one could have predicted the bankruptcy of Chrysler and General Motors, let alone anticipated the conditions imposed by the court when they emerged from bankruptcy. I think it is completely understandable that the company now wants the UAW represented membership to approve additional changes in the contract to keep Ford Motor Co. "cost-competitive" with it's domestic rivals, and UAW leadership is correct to recommend a "Yes vote".
Ford is currently carrying billions of dollars of debt that Chrysler and GM do not have, due to their "quick-rinse" trip through bankruptcy earlier this year. While there are advantages and disadvantages to going through bankruptcy, the elimination of debt gives a company an undeniable cost advantage over its competitors. While Ford management understands this, along with the long term implications, Ford's UAW membership DOES NOT seem to understand this, and seems willing to let Ford return to the struggle of trying to compete with companies that enjoy a lower labor-cost advantage.
In addition to the labor-cost issues, there is the less talked about "public-perception" problem that may actually end up doing more damage to Ford in the long run. Ford was just beginning to establish a separate identity from Chrysler and GM and gain market share because of it.It wasn't just due to the fact that Ford did not take government money, Ford was also looked at as "different" than the other 2 UAW represented auto companies because we seemed to be able to understand the need for Ford to keep it's labor costs competitive with the competition.
But now, if this contract modification is defeated, much of that identity and goodwill may be lost.