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Hourly workers represented by the United Auto Workers ratified a labour deal with Ford Motor Co (F-N) Wednesday, leaving Chrysler as the last U.S. automaker without a finalized contract.
Ford hourly workers voted by a nearly 2-to-1 margin to approve the four-year deal, clearing the way for the creation of almost 6,000 jobs and investment of more than $6 billion in the automaker's U.S. plants and also boosting its chances for a credit rating update that would reduce borrowing costs.
"The American auto industry is on its way back," UAW President Bob King said in a statement.
The proposed contract had been in jeopardy as late as the end of last week when early returns had shown a slight majority of those voting against ratification, but intense lobbying by UAW leaders who warned a better deal was not to be had in the weak economy helped turn the tide.
Sixty-three percent of Ford workers casting ballots voted to ratify the deal, but UAW leaders acknowledged the high level of frustration among many of the 41,000 members.
"Working people in this country are clearly frustrated about the inequity in our society," said Jimmy Settles, UAW vice president in charge of Ford relations. "Our members at Ford are frustrated with the economy, the lack of wage increases over the years, outrageous executive compensation and the immorality of Wall Street."
The deal gives Ford workers at least $16,000 in bonuses over the term of the contract, including a $6,000 signing bonus. That is more generous than the $11,500 minimum General Motors Co workers will receive over the life of their new deal.
Many veteran Ford production workers were unhappy with the lack of a raise since 2003 in their base wage even as Ford Chief Executive Alan Mulally's 2010 compensation package totaled $26.5 million.
Another sore point: Many Ford workers had hoped the contract would resolve a grievance over pay that salaried employees received, but hourly workers did not. An arbitrator is expected to decide on the issue in mid-November.
Workers at several Ford plants had voiced fear about the prospect of a strike if the contract failed to pass. Ford was the only U.S. automaker whose UAW members retained the right to strike if a deal could not be reached.
Ford executives, who will host a conference call Thursday morning to explain the deal's financial impact, touted the pact Wednesday.
"Our agreement is fair to our employees and it improves our competitiveness in the U.S.," Mark Fields, Ford's president of the Americas, said in a separate statement.
Analysts have said the proposed deal with Ford and the contract at GM would cap costs and link the pay of blue-collar workers more directly with performance.
"I'm glad to see they got it done because we didn't need a strike," said Jefferies analyst Peter Nesvold, who has a "buy" rating on Ford shares. "It does set the stage for a potential credit upgrade and a dividend, potentially Louisville plant will add 1,300 workers.
Michigan Assembly makes the Ford Focus small sedan that saw sales rise 41 percent in September from a year ago. Ford said Focus sales have been hemmed in by lack of supply that it said the added production will address.
The Chicago Assembly Plant makes the Explorer SUV, which has seen sales more than double from a year ago.