A rift between Ford and the United Auto Workers was quickly reconciled to avert the painful situation that passed between General Motors and its union workers.
The strike that took place at General Motors lasted for about six weeks and was a very expensive one. It was a strong lesson for Ford and its workers.
Even when talks were going on between the UAW and GM, preliminary talks were doing their rounds at Ford too. However, a quick settlement took place between the two parties.
55,000 union members will have to ratify the dealt to bring it into effect.
The strike at General Motors started on Sept 16 and lasted for 6 weeks. It cost the company almost $2.9 billion, as work was stagnated and expenses were on the increase.
But at Ford, things were different as the last time work stopped at Ford was in 1976. Four years back the Ford union members had asked for their first pay increase after 10 years.
Workers at Ford demand the same terms as at General Motors. It is an understood norm than workers demand the same terms at all U.S. auto companies. Hourly workers at GM got a signing bonus of $11,000 and a 6 percent increase over the 4-year life contract. Moreover, temporary workers will soon be hired on a permanent basis. Health care coverage will be the same. Ford workers expect the same conditions.
The automobile industry is facing new restructuring with its entry into electric vehicles and autonomous driving. The already slowing business in the automobile sector will have its costs escalating if it has to venture into new technology.
Ford will have to face extra expenditure of $11 billion towards restructuring of its business in the electric auto vehicles and autonomous vehicles.
The trade war between the U.S. and China has brought a slowdown that has led to lower sales in the auto industry.