Ford and UAW are quickly joining forces to avoid a strike

Less than a week after members of the United Auto Workers Union returned to work at GM ( GM ) dealers for UAW and Ford [19659002] ( F ) announced late Wednesday that they had reached a tentative agreement.

While there were some preliminary talks between the union and Ford before and even during the GM strike, the Ford negotiations only moved to the front burner for the union on Monday.

The agreement must still be ratified by the 55,000 union members at Ford before it can take effect. Neither the union nor the company would disclose any details of the agreement.

But the quick settlement was a striking contrast to the disputed talks at GM. Nearly 50,000 GM workers were on strike from September 1[ads1]6 to members ratifying a new deal and starting to get back to work this Saturday. GM revealed this week that it expects the strike to cost $ 2.9 billion.
The automotive industry faces a decline in sales and the risk of further declines if the US economy continues to decline. It also faces the need to spend billions on developing the next generation of vehicles, electric and self-driving cars that may not be profitable for many years.
Ford has said it plans to spend $ 11 billion over the next few years to restructure its business globally to free up funds to develop electric and autonomous vehicles. But while it is profitable, it recently lowered its earnings forecast for the rest of the year. And the cost of the restructuring plans was an important factor in reducing the credit rating to garbage bond status recently.

"It looks like both parties were taking a healthy approach and avoiding a painful strike that would have benefited some of them," said Patrick Anderson, CEO of Anderson Economic Group, a Michigan research firm following the automotive industry.

A successful ratification vote is by no means assured. Four years ago, only 51% of union members in Ford voted for a deal that included their first pay raises in more than a decade.
  Drive Shelby GT500, the most powerful car Ford ever made

But it always worked unlikely that Ford workers would follow GM workers on strike. There has been no shutdown at Ford since 1976.

And the biggest controversy at GM – the carmaker's decision to shut down three US plants where work was halted earlier this year – was not present at Ford, where no US plant closures are planned.
The union had promised to make GM shifts back from Mexico to try to revive the plants. While GM agreed to build an electric truck that was scheduled at a time yet to be determined by a fourth plant scheduled for closure, it would not move work back from Mexico to save any of the other three plants.

The workers at Ford are likely to receive many of the same terms that are found in the GM contract. Once the union has reached an agreement with a US carmaker, it tries to get the other two unified companies to follow that pattern.

Under the GM agreement, hourly workers receive a $ 11,000 signing bonus, a 6% increase over the four-year contract life, an agreement that many temporary workers can be permanently hired, and health care coverage substantially unchanged despite for the company's desire for workers to assume a much larger share of costs.

If Ford employees agree to a new contract that includes these provisions, they will benefit from not losing six weeks' wages to get those benefits.

When Ford's ratification vote is complete, probably over the next few weeks, the union will turn to the third unionized US automaker, Fiat Chrysler ( FCAU ) . Contract talks there could be complicated by the potential announcement of a merger with French carmaker PSA, the owner of Peugeot.

– CNN Business & # 39; Vanessa Yurkevich contributed to this story

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