By Jim Hagerty
Union workers at Ford Motor Company voiced their opinions last week by voting down the company’s proposal to cut costs by modifying pay packages. The vote stopped what could have resulted in a six-year wage freeze for newly-hired workers and given the green light for Ford to transfer workers at will. Ford had also attempted to prevent workers from going on strike until 2015.
With the proposal squashed, the company is forced to ratify their attempts to beef up their bottom line, despite showing a more than $2 billion profit in the second quarter. Union reps say Ford’s production numbers indicate a drastic cost-cutting effort isn’t warranted. Ford, unlike Chrysler and General Motors, is not operating on federal bailout funds and has not been forced to restructure. With CEO Allan Mulally being paid $17.7 million last year, UAW officials said pay decreases or contract changes should be taken from executives rather than the assembly force.
Ford also posted an increase in its third-quarter numbers with its first pre-tax profit since the first quarter of 2008. Ford showed a profit of $997 million for the third quarter, a $1.2 billion improvement from last year. Ford also reported a $4.6 billion reduction in engineering and manufacturing costs in the first nine months of the year. The company says it will trim its list of global suppliers to 750, an effort that will help the automaker stay profitably through 2011.
From the November 4-10, 2009 issue