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Canadian Auto Union's Contract A Money-Saver, Ford Chief Says

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The Associated Press

The Tampa Tribune

Published: May 6, 2008

DETROIT - Ford Motor Co.'s top manufacturing executive says the company will save money with a new contract ratified last weekend by the Canadian Auto Workers, even though it doesn't include a lower-tier pay scale for new hires.

Joe Hinrichs, group vice president of global manufacturing, said in an interview Monday that Ford was able to freeze base wages and pension costs, as well as buy the union out of one week of vacation. Hinrichs also says Ford won 30 minutes more production time at its Oakville, Ontario, factory that makes the strong-selling Ford Edge and Lincoln MKX crossover vehicles.

About 9,000 union workers at Ford approved the three-year deal late Sunday. The surprise pact was announced last week and came nearly five months before the union's national contracts with automakers expire.

Union President Buzz Hargrove says the Ford deal will serve as a pattern for talks that were to open Monday with General Motors and Chrysler.

A union economist calculated that under the new three-year deal, Ford's hourly labor cost for active workers at union-represented plants would be $67, about $7 an hour more than at U.S. plants represented by the United Auto Workers.

But Hinrichs said the Canadian union numbers don't include all aspects of the contract.

"They're not our numbers," he said.

Hinrichs said there was "significant movement" in wages, pensions and time off. Ford also won an entry-level wage that starts at 70 percent of the top hourly rate and grows to the maximum in three years. That will bring Ford significant savings as it hires new workers, Hinrichs said.

But the contract didn't gain Ford what it and the other automakers got from the UAW last fall - a lower-tier wage rate of about $14 an hour, about half the hourly rate of a UAW production worker.

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