Newspaper article St Louis Post-Dispatch (MO)

Analysts Wonder How Ford Won Driver's Seat

Newspaper article St Louis Post-Dispatch (MO)

Analysts Wonder How Ford Won Driver's Seat

Article excerpt

Ford Motor Co.'s long-shot bid to sit down first with the United Auto Workers union paid off, but analysts wondered Wednesday what the automaker had to give up in exchange for being the Big Three's lead-off negotiator.

"Everyone wants to be first, and that's obviously a plus for Ford in that regard," said J.P. Morgan analyst David Bradley. "The question is, `What price did they have to pay to be first?' "

The UAW told Ford executives Tuesday it had selected the company over Chrysler Corp. and General Motors Corp. to be the first to hammer out a new labor contract. Union officials stopped short of referring to Ford as its traditional "strike target." In the past, the UAW has selected one of Detroit's Big Three automakers to start serious bargaining about two weeks before the contract expires. Automakers prefer to be the target because they can dictate some of the contract terms, even though they run the risk of a strike. Ford, which also was the target in 1993, did just that. Expecting to hire thousands of new workers, it negotiated a "grow-in" provision allowing it to pay new hires at 70 percent of the full rate. Ford has brought on more than 20,000 new hourly workers in three years. Since January, analysts and other auto industry observers believed Chrysler Corp. would be the target because it outsources more work than its domestic competitors and might be willing to cut back. Outsourcing - the practice of contracting parts work to outside suppliers - is a key job security issue for the UAW this year. Both union and Ford officials declined to comment on the UAW's decision to go with Ford. Despite the coup of beating out GM and Chrysler, the company issued a mild statement saying it is "encouraged" by the tone of the talks. In picking Ford, which employs about 104,000 UAW members, the union starts with a company that is recognized as having the best labor relations among the Big Three. The UAW last struck a Ford plant in 1986. …

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