By Jeff Bennett
Of DOW JONES NEWSWIRES
DETROIT -(Dow Jones)- Ford Motor Co. (F) and United Auto Worker leaders must now seek contract changes through informal talks after the union's rank-and-file soundly rejected the auto maker's demands for more cost concessions.
A total of 70% of the voting production members and 75% of the skilled trade workers turned down the contract modifications, the UAW officially announced Monday. The results weren't a surprise, given early voting returns last week which showed building momentum against the changes.
"While we will not be returning to the bargaining table, our leadership will continue to work with Ford on a daily basis in an effort to keep new products coming into our plants," UAW President Ron Gettelfinger and Vice President Bob King said in a joint statement. "We will also continue to work with Ford to ensure they maintain the highest ratings in quality and productivity and insure that they remain competitive.
Ford argued that it needed parity with the concessions given to General Motors Co. and Chrysler Group LLC so those two companies could secure federal bailout money before filing for bankruptcy protection.
The auto maker and the UAW must now try to reach an agreement on changes without triggering the need to open the 2007 contract.
"Ford is disappointed that the additional changes were not ratified," said Joe Hinrichs, Ford's group vice president of global manufacturing and labor affairs. "Additional modifications we sought recently were designed to honor pattern bargaining and provide Ford with similar additional efficiencies as those ratified this year for our domestic competitors."
Those concessions would have implemented wage freezes on new hires, barred the union from striking until 2015 and changed work rules to allow Ford more flexibility in how it used its work force.
Ford Chief Executive Alan Mulally, however, downplayed importance of the concessions, telling analysts during a quarterly conference call Monday that he saw no disadvantages despite the outcome.
"Clearly, Ford has so many more advantages than the potential to be disadvantaged," Mulally said. "Now the reason I say potential is that we have worked very well with the UAW over the years to ensure a transformational agreement that allows us to be competitive with the best in the world."
Workers said they objected to giving more concessions amid Ford's brightening financial situation. The auto maker surprised Wall Street by reporting a profit of nearly $1 billion for the third quarter.
Mulally and Chief Financial Officer Lewis Both have declined to say how much concessions would have saved the company.
-By Jeff Bennett, Dow Jones Newswires; 248-204-5542; jeff.bennett@dowjones.com