New Contract Protects Wages, Provides Four Lump Sums
The proposed agreement protects the wages of UAW hourly workers at Ford, and provides four lump sum payments, one in each year of the agreement.
Projected Total Gains
Total economic gains from the proposed agreement add up to $12,904 for a typical Ford assembler, based on a standard 2,080-hour year and 10 percent overtime. That figure includes the $3,000 settlement bonus, performance bonuses of 3 percent, 4 percent, and 3 percent, and projected cost-of-living adjustments, after diversions.
Settlement and Performance Bonuses
UAW-represented Ford workers, including long-term temporary workers, who are on the active roll on the effective date of the agreement, will receive an up-front settlement bonus of $3,000. Workers on pre-retirement leave, in protected status, on temporary layoff, on Family and Medical Leave, or those on leave of absence beginning not earlier than 90 days prior to the effective date of this agreement, are also eligible. The settlement bonus will be paid in the second pay period following official notification of the agreement’s ratification.
Three additional bonuses will be paid in the second, third and fourth years of the agreement. In October 2008, UAW Ford workers with seniority as of Sept. 15, 2008, will receive a lump-sum performance bonus equal to 3 percent of qualified earnings (including base wages, COLA, overtime, shift and seven-day operator premiums, call-in pay, vacation, holiday and other paid time off) over the preceding 52 pay periods. In October 2009, workers with seniority as of Sept. 21, 2009, will receive a lump-sum bonus equal to 4 percent of qualified earnings. A final performance bonus, equal to 3 percent of qualified earnings, will be paid in October 2010, to workers with seniority as of Sept. 20, 2010.
Profit Sharing Maintained
The UAW Ford profit-sharing formula will continue unchanged, and continue to make graduated payments based on Ford' s U.S. profits.
In addition, our bargaining team negotiated an expanded definition of the profits to be included in the formula. The definition was clarified to ensure that it will include any potential income resulting from the establishment of an independent VEBA trust for retiree health care.
Ford Motor Credit Co., however, will no longer be included in the profit-sharing calculation.
Cost-of-Living Allowance
The proposed agreement maintains the existing COLA formula, based on the CPI-W for all items less medical care. As of the effective date of the agreement, $2.03 of the current $2.13 COLA float will be folded into base wage rates. The remaining 10 cents will be the initial COLA float.
The 2 cents quarterly diversion agreed to in the 2005 UAW-Ford health care settlement agreement will continue, and be made permanent. An additional 4 cents per quarter will be diverted to fund the new VEBA that will secure lifetime health benefits for current and future retirees. A final 4 cents per quarter will be diverted to defray the cost of health care benefits for active workers. These diversions will be taken in the order listed. If a quarterly COLA adjustment is less than 10 cents, the company will not have the right to make up the difference in future quarters.
Additional diversions totaling 5 cents will be taken until the cumulative 17 cents in diversions agreed to under the 2005 health care settlement is reached. Should the timing of these diversions, which began earlier at GM than at Ford, lead to a disparity in COLA with GM, additional diversions of no more than 2 cents will be taken until parity is achieved.
