The UAW leadership had negotiated an agreement with Ford to make pretty much the same concessions it made to GM and Chrysler including limits on the right to strike.
Well, apparently the workers didn’t like it one bit! The vote was so overwhelmingly against the deal that it is already obvious even though more votes are supposed to be cast on Sunday, November 8.
What's happening here? The fact that Ford is doing well in comparison with the other Detroit automakers may have had an influence in the workers’ decision. The carmaker made a profit in the second quarter of this year of more than $2.2 billion. And analysts say that it will probably surpass Wall Street expectations for the third quarter.
Still, Ford is not profitable. It lost $14.6 billion in 2008 and has a heavy debt of tens of billions of dollars. Chrysler and GM were able to drop their debt when they took the bankruptcy option earlier this year.
Worse, this result could mean the end of the pattern bargaining system which has been used by the union and the Detroit Three to come up with agreements for decades. The pattern bargaining system is when the union makes an agreement for a new contract with one of the Detroit Three and then that agreement serves as a pattern for the agreements with the other two. Pundits are now saying that not only does it spell doom for pattern bargaining, it might have a major adverse affect on the industry and the region as a whole.
Besides Ford, Ron Gettelfinger, the president of the UAW, and UAW vice president Bob King are hurt by this turn of events. Gettelfinger and his associates in the union worked hard to get the agreement confirmed. And King actually negotiated the agreement.
And now Ford is expected to retaliate. Some models Ford had previously agreed to manufacture in the U.S. may be constructed elsewhere because it is more cost efficient to do so.
Our take? You don’t want Ford to get mad. You won’t like Ford when it gets mad.