UAW Members Narrowly Approve Ford Contract That Includes Plant Closure

Ford has avoided a potential strike as UAW members have agreed to a new collective bargaining agreement.

According to the UAW, only 56.3% of workers voted to approve the contact. That’s a relatively slim margin and the Detroit Free Press says both the Lima Engine Plant and Chicago Assembly Plant – which builds the Explorer – voted against it.

While everyone isn’t happy, the agreement provides hourly workers with a number of benefits including a ratification bonus of up to $9,000 (£6,941 / €8,121). The company also said employees can expect “wage increases, bonuses and continued profit sharing.”

The use of temporary employees has been a contentious issue, but Ford says they’ll now be given a “guaranteed path to permanent full-time employment.” Furthermore, current temporary employees will have an opportunity to make the top wage rate by the end of the new contract.

In return, the UAW will allow Ford to use more temporary workers and create a retirement program that will “improve workforce composition, lowering labor cost.” The automaker also won’t have to increase pension obligations or payments to retirees.

Unfortunately, the agreement also calls for the closure of an engine plant. Ford didn’t mention it by name, but the Detroit Free Press says it’s the Romeo Engine Plant in Michigan. The plant opened in 1973 and currently employs around 531 hourly workers.

Also Read: Ford To Shut Down Engine Plant In Romeo, Michigan, Following UAW Deal

While one plant is closing, Ford says the agreement includes a $6 (£4.6 / €5.4) billion investment in American manufacturing facilities and this will help to create or secure 8,500 hourly jobs. The company also said employees at the closing plant will be offered jobs at a nearby facility.

Speaking of plants, the Flat Rock Assembly Plant will reportedly get $250 (£193 / €225) million for a “new product.” There’s no word on what that vehicle will be, but the plant currently builds the Ford Mustang and Lincoln Continental.

In a statement, Ford’s Joe Hinrichs said “This deal helps Ford enhance our competitiveness and protect good-paying manufacturing jobs.” He added, the company was pleased the agreement could be made without a “costly disruption to production.” That’s a subtle reference to the GM strike which delayed the launch of the 2020 Corvette and cost the automaker billions.

With Ford and GM out of the way, the UAW will now turn its attention to FCA. The automaker released a statement saying they welcome the talks and hope to “reach an agreement that will allow us to continue investing in our future and create opportunities for our employees, their families and the communities where we live and work.”

The talks come at an unusual time as FCA and PSA announced plans to merger in October. This will likely push the union to seek guarantees promising to protect US jobs.

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