Ford At Greater Risk of Strike After Avoiding Bailout Money

It may seem a cruel irony that the one U.S. automaker that took no bailout money is now at greater risk of a national strike as it continues labor negotiations with union leaders.

Based upon initial tallies last week, rank and file Ford United Auto Worker members were leaning overwhelmingly toward a national strike authorization against their employer. With the current national labor contracts set to expire September 14 at General Motors, Chrysler and Ford, local union representatives at Ford were reporting 97 percent of their membership was voting to authorize a strike, if necessary.

"I don't want to see any more concessions,” said Gary Farris, a Kentucky-based Ford plant employee since 1993. “I'd like to get a raise we haven't had a raise for a long time."

Farris says he has two kids in college and would like to see Ford again provide the same college assistance that it took away just as his kids were starting college.

Ford is the only one of the Big Three domestic automakers where, legally, workers can strike. Both GM and Chrysler and their union workers agreed in accepting the federal government's auto bailout in 2009 to resolve contract issues through binding arbitration.

But as ominous as the strike authorization sounds, some auto analysts believe it is merely a negotiating tool and that the prospect of a strike against Ford is unlikely.

"This is a pro forma kind of a thing. It's something the union has to do as part of its governing regulations, and they go to the membership and ask are we willing to strike," said Kristin Dziczek of the Center for Automotive Research. "In the contract it was one of the union’s weapons. They’ve got another arrow in the quiver."

Further, the mood among the UAW rank and file is not ripe for a strike, believes Dr. Arthur Schwartz of Labor and Economics Associates, who is also a former labor negotiator for GM.

"I think they're going to be able to get an agreement. I think there's room to reward the workers for the success of the company while still not adding to the fixed costs in the future of the company,” he said. “There's a settlement out there, and to not get it, I think, would really be a tragedy. I don't think Bob King and the UAW leadership is really thinking about that."

Dziczek says that the ravages of the recession have been a learning experience for the UAW, much as they have been for the entire American workforce.

"There's been a change in terms of understanding the fate of membership is really tied to health of those companies, so the leadership really understands that they are trying to create a more competitive company. When the company does well, their members will do well. And when the companies do not do so well members, will also not gain," he said.

In addition, the increased globalization of industry and auto manufacturing has focused the UAW's energy in other directions.

"UAW President Bob King has two things that he's trying to do," said Schwartz. "One is, he's trying to organize the foreign transplants and a strike at Ford would send absolutely the wrong message in that regard. And secondly, he's got the Obama re-election campaign. And Obama was very good to the auto industry in general in '09. And a strike would be a real thumb in the eye in that case. I really can't see a strike at Ford.”

Still, the strike threat that now looms against Ford pertains to only national issues. But there are many UAW local chapters that negotiate local contracts, and a strike at the local level can be as damaging as one at the national level. GM and Chrysler are still susceptible to local strikes.

"If you strike a key engine plant or a key stamping plant you can shut down assembly plants. The 1998 Flint strike at GM was a local strike that essentially shut down the entire company," said Schwartz.

While most of the attention is centered on the Ford negotiation, the UAW is simultaneously negotiating with GM and Chrysler. According to the Detroit News, bargaining with GM and Chrysler is well ahead of the Ford talks, as negotiators work through the weekends and Labor Day holiday.

The talks with the larger manufacturer, GM, will mostly likely dictate the majority of the terms of the Chrysler contract. Ford and UAW negotiators are also well into their talks, but the intensity of negotiations is not expected to peak until after the Labor Day holiday.