New Wage and Benefit Structure for Entry-Level Employees
Seniority Workers Maintain and Regain
Right to Preferred Jobs
The UAW’s goals during this round of bargaining included winning new product and investment in UAW Ford facilities, a moratorium on outsourcing, greater job security for our members, and protecting seniority rights for UAW Ford workers, including the right to use seniority for preferred jobs.
Under the terms of the proposed agreement, every current seniority worker at Ford is protected and will keep his or her current rate of pay and benefit package.
The entry-level wage structure in this agreement helps our union preserve jobs while the company restructures and creates the environment for adding new jobs. Upon ratification, this provision of the agreement will produce immediate results for our members. Ford’s agreement to insource 1,500 new UAW jobs, and evaluate another 1,700 for insourcing, is directly related to the new wage structure for entry-level employees hired on or after the effective date of the proposed agreement.
UAW Ford workers currently assigned to ACH facilities and those on protected status will be placed before the company can hire any workers into entry-level positions.
Workers hired under the new wage structure will be UAW Ford employees, with all the rights and protections of our union contract, and will have the opportunity to transfer to traditional, higher-paying positions as jobs become available regardless of where the opening occurs, without relocating, except in two facilities.
It is important to note that no current member who has seniority on the effective date of this agreement will ever be assigned entry-level wages. Only those employees hired after the effective date will be subject to the new rates.
In order to maintain Ford as a provider of standard-setting manufacturing jobs now and in the future, the number of entry-level jobs will be 20 percent of the UAW Ford workforce corpor-atewide. Once this 20 percent is reached, workers hired at entry-level wages will be transitioned by seniority to positions at traditional pay rates before any new entry-level workers are hired.
Entry-level workers who convert to traditional status will retain their cash balance pension plan and defined-contribution post-retirement health care fund, as described below, but will otherwise receive the same pay and health care benefits as traditional UAW-Ford employees.
Entry-Level Wages
The entry-level wage structure will have a starting rate of $14.20 per hour and a full rate of $15.34 per hour. Entry-level workers will advance from the starting rate to the full rate for their classification in four progression increases, one every 26 weeks.
In addition, entry-level workers will receive annual raises through a new wage formula that will provide increases tied to either (a) the percentage increase in average hourly earnings, excluding overtime, of workers in the U.S. manufacturing sector or (b) the annual rate of inflation, whichever is greater, up to 3.75 percent. (If the wage formula generates an increase above 3.75 percent, the additional amount will be subject to a mutually-agreed disposition.) Increases will take effect in the first pay period of each calendar year.
In addition to annual wage formula increases, entry level workers with seniority as of the designated eligibility date will receive performance bonuses in each year of the four-year agreement. An entry-level worker’s performance bonus will be equal to 3 percent of qualified earnings during the previous 52 pay periods. Performance bonuses will be paid in May 2008, 2009, 2010 and 2011, based on April eligibility dates.
Entry-level workers are eligible for the Christmas bonus, as described on page 26.
Entry-Level Benefits
Entry-level workers will be covered by a modified benefit plan, including the following elements:
• A cash balance defined benefit retirement plan. Ford will deposit 6.4 percent of workers’ wages into a portable retirement plan, which will accrue interest tied to U.S. Treasury bonds. This plan provides for three-year vesting.
• Retirement health care fund. To help fund health care in retirement, Ford will contribute $1 an hour for each hour worked into each entry-level worker's TESPHE.
• Health care plan. Entry-level workers will be covered by the National PPO and will have annual in-network deductibles of $300 single/$600 family. Co-insurance will be 10 percent in-network, with an annual cap on out-of-pocket expenditures of $1,000 single/$2,000 family. To defray these costs, Ford will provide workers with $300 single/$600 family annually in a health care spending account. Entry-level workers will be eligible for dental coverage and a vision exam after three years, and for full vision coverage after five years.
• Supplemental Unemployment Benefits (SUB). Entry-level workers with at least one but less than three years of seniority will be eligible for 26 weeks of SUB. That increases to 52 weeks (which can be extended) for workers with three or more years of seniority.