Ford to pay workers $6,000 bonus in new contract

[Omaha Steve]

Source: AP-Excite

By DEE-ANN DURBIN and TOM KRISHER

DETROIT (AP) - The union that once set the gold standard for American wages is giving up pay raises in exchange for a piece of the auto industry's profits and the promise of thousands of new jobs.

Under agreements struck with Ford and General Motors, most of the companies' factory workers will get profit-sharing checks instead of annual raises. They'll also get a signing bonus. In turn, the automakers will increase their workforces and invest billions more dollars in their factories.

It's an unusual turnabout for the United Auto Workers. For decades, its members' pay and benefits were the envy of workers around the world, and it wouldn't hesitate to strike to protect them. But the agreement signals a new reality. After the industry nearly collapsed two years ago, a sobered UAW is no longer fighting the Big Three but fighting to compete against rivals who pay their workers far less.

"We are aware of the competition that Ford and General Motors and Chrysler face," UAW President Bob King said Tuesday after announcing terms of a new four-year contract with Ford. "If we are going to succeed in the long run and really be able to have long-run security and decent income for our membership, we can't put Ford and GM and Chrysler at a competitive disadvantage."

Read more: http://apnews.excite.com/article/20111004/D9Q5PG4G0.html

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John Fleming, Ford executive vice president, Global Manufacturing and Labor Affairs, left, and Marty Mulloy, Ford vice president, Labor Affairs field questions during a news conference regarding Ford Motor Company and the United Auto Workers union (UAW) reaching a tentative agreement on a new four-year labor contract at Ford World Headquarters Media Center in Dearborn, Mich. Tuesday, Oct. 4, 2011. (AP Photo/Gary Malerba)

[demosincebirth]

1. Job security, good pensions and excellent wages. Good work UAW!

[Firebrand Gary]

2. This is excellent news! K&R

[Booster]

3. Hooray for Ford, GM and the UAW. Hope this catches on.

[iandhr]

4. How does profit sharing work?

Are the workers given shares in the company as part of their conversation?

[Omaha Steve]

7. Profit sharing used to be very common

A defined percentage ( I think the legal max is 15% set by the IRS) of profits or a target amount is divided up between the number of employees in the plan.

[aquart]

5. Unions matter.

[dkf]

6. Yes. Unions need to work with corporations so that both may succeed.

A corporation that is overobligated will collapse. There needs to be flexibility so that the corporation can reward workers when there are funds but aren't over burdened in tough times.