P&A Providers & Administrators
MenuMENU
SearchSEARCH

Wall Street Optimistic Ford/UAW Deal Will be Approved

October 18, 2011
2 min to read


Wall Street is optimistic the tentative labor agreement between Ford Motor Co. and the United Auto Workers that keeps U.S. labor costs competitive will pass in the final two days of voting.


Ratings agencies have said successful ratification of the vote is a precursor to upgrading Ford's credit rating. The automaker is hoping to return to investment grade as early as year end, a status it lost in 2006, according to The Detroit News.

Ad Loading...


Two-thirds of the 41,000 Ford workers have finished their ratification votes and 62 percent are in favor of the four-year pact.


Most of the union locals still to report will not be finished voting until Tuesday — the deadline for all 58 locals.


The agreement requires a simple majority to be ratified, at which point the agreement becomes official. Confirmation of passage is expected Wednesday.


"After some early results appeared to put ratification at risk (vote was 55 percent against early Friday), several large facilities have voted in favor by wide margins, including Dearborn Assembly (62 percent in favor) and Kansas City Assembly (88 percent in favor)," said analyst Rod Lache of Deutsche Bank in a research note Monday.


"It now appears likely the deal will pass, as the remaining 40 percent of the workforce would need to vote approx 70 percent "no" in order to swing the overall outcome."

Ad Loading...


Lache said the agreement will keep Ford's U.S. labor costs relatively flat over four years, ratification removes the risk of a work stoppage and the deal positions Ford well if the auto industry recovers in the U.S.


Additionally, "we believe that this clears one of the final hurdles to the announcement of a meaningful dividend at Ford in the relatively near future," Lache said.


Brian Johnson at Barclays Capital also said in a research note Monday that approval by Ford workers appears likely.


"Overall, we estimate the tentative contract would add about 70 cents per hour to Ford's labor costs, or about $70 million annually — assuming only 1,000 skilled trades retire," Johnson said.


"Higher attrition could lower the net cost further," Johnson said, noting Ford still has the highest cost per hour because the $58 an hour rate going into the contract was much higher than Chrysler Group LLC's $49 and General Motors Co. is expected to benefit from greater skilled trades attrition and cuts to legal services.

Ad Loading...


Barclays estimates a strike would have cost Ford $273 million a day in lost revenue and $71 million a day in lost profit, although some of that would be made up in 2012 with increased overtime, Johnson said.


"Nevertheless, a strike would have delayed any rating agency upgrade or dividend," Johnson said.

More Industry

Line of like-new vehicles in outdoor lot
Industry•by Hannah Mitchell•November 3, 2026

CPO Sales Could Take Off in the Right Conditions

A recent Cox Automotive consumer survey reveals the size of an undertapped market for the vehicle segment given affordability pressures.

Read More →
Small black toy car on top of a map.
Industry•by Lauren Lawrence•November 3, 2026

Global Consumer Trends Diverge

Price remains a top consideration for U.S. car buyers, and they are the most brand-loyal consumers to established automakers, according to a new survey.

Read More →
Two men and one woman standing in front of blue walled Chevrolet dealership entrance.
Industry•by Hannah Mitchell•October 27, 2026

Badger State Dealership Gets New Owner

The longtime southern Wisconsin store moved from one area auto group to another, keeping the business in Dairyland.

Read More →
Ad Loading...
Two hands, one handing off set of keys to the other.
Industry•by Lauren Lawrence•October 27, 2026

The Cycle of Negative Equity

Third-quarter data shows consumers still rolling over debt and stretching loan terms, raising their risk of remaining underwater.

Read More →
Orange electric vehicle charging station.
Industry•by Lauren Lawrence•October 20, 2026

Charger Network Growth Slows

Despite a projected increase in public EV chargers in 2026, charging infrastructure remains a top concern for consumers as the gap between the most and least EV-friendly places remains substantial.

Read More →
Fan of $100 bills atop a white envelope
Industry•by Hannah Mitchell•October 13, 2026

Lenders, Consumers Take on More Auto Loan Risk

September records loosened credit access the most in over a decade as buyers took advantage of the conditions to afford trading, though loan applications fell.

Read More →
Ad Loading...
Red type R Honda civic parked on road.
Industry•by Lauren Lawrence•October 13, 2026

Next-Gen Hybrids in Sight

Dealerships can expect to see revamped hybrids from Honda next year as the company rolls out a new system and model lineup.

Read More →
Dodge ram emblem on orange vehicle exterior
Industry•by Hannah Mitchell•October 6, 2026

Gem State Stores Change Hands

A larger auto group founded in the industry’s early years sold two franchises to a neighbor group that's on a growth spurt.

Read More →
Graphic of model car driving on fake road.
Industry•by Lauren Lawrence•October 6, 2026

Charging In Motion

Honda has been researching wireless in-motion charging for electric vehicles since 2025, and new technology developments have put it a step closer to a final product.

Read More →
Ad Loading...
front grill of a Ford truck with blue Ford emblem
Industry•by Lauren Lawrence•September 30, 2026

Twin Cities Stores Sell

Minnesota-based Walser Automotive Group made what it called the most significant acquisition in its history with a three-rooftop deal in Minneapolis.

Read More →