Agreement at Ford plant in Spain follows long dispute

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The 10-month dispute at the Ford Almussafes plant in Spain ended in an agreement in late October 1998, after the vice-president of Ford's HQ in Detroit had threatened to close the plant in a videoconference, which reportedly shocked public opinion. The wide-ranging agreement covers areas including pay, apprenticeships and voluntary retirement.

The Ford factory in Almussafes was opened in 1976, and at the end of 1998 provided direct employment for 8,300 people and indirect employment for a further 24,000 people in 400 other companies across the Community of Valencia, representing 2% of the active population. These figures give an idea of Ford's importance in this region, and explain why the long industrial dispute at the plant (ES9810287N), which began in early 1998, was followed with such concern by the public and by the local authorities, which offered to act as mediators.

At the beginning of the dispute, the company's initial objective was to achieve an increase in production at the plant from 1,560 vehicles to 2,100 per day. Until recently, every day the factory produced 770 vehicles of the new Focus model and 790 of the Ka model. However, the demand for the Ka increased, making it necessary to manufacture 1,100 of this model, and consequently to reduce the production of the Focus by 310 units (that is, to a daily 460). In order to return production of the Focus to earlier levels, the company had sought from the outset of negotiations to introduce more flexible working hours, by making it compulsory for each worker to work 10 Saturdays per year.

The dispute and its impact on public opinion

Initially, the trade unions had wanted Saturday working to remain voluntary, an advantage they had obtained in the 1970s as the result of numerous strikes, rather than become compulsory. To meet the demand for greater production, the unions proposed the introduction of a third shift, which would require an increase in the workforce and a revision of occupational classifications. Negotiations dragged on, and there was a growing division amongst the trade unions represented on the workers' committee. The offer made by the company on subjects such as wage increases, apprenticeships, holidays and special bonuses seemed to constitute the beginning of an agreement for two unions - the General Workers' Union (Unión General de Trabajadores, UGT), with 14 representatives on the committee, and the Union of Ford Administrators (Sindicato de Administrativo de Ford, FAMIF), with two representatives. However, the four other unions rejected the offer and called for rallies, a demonstration and a 24-hour strike - these were the Workers' Commissions (Comisiones Obrera s, CC.OO ), with 10 representatives, the General Confederation of Workers (Confederación General de Trabajadores, CGT), six representatives, the Unitary Platform of Workers (Plataforma Unitaria de Trabajadores, PUT), three representatives, and the Regional Union of Valencia (Sindicato del País Valenciano, SPV), two representatives.

The dispute became more complicated owing to the gulf between the positions of the company and the unions on issues like changes to occupational gradings for production workers, the production bonus, job creation, the third shift, voluntary early retirement and the 35-hour week. However, perhaps one of the most controversial points in the dispute was the change of occupational classification for production workers from level five to level six, demanded by the unions, particularly CGT.

After 10 months of negotiations, owing to the difficulty in reaching an agreement, the company threatened to dismiss 1,500 workers in the period up until 2003 and not to renew the contracts of the 400 or more temporary workers whose contracts terminated on 23 December 1998. It also warned that if an agreement were not reached quickly, then the daily production of the 310 Focus models would be transferred to the Ford plant in Saarlouis, Germany. The unions argued that wage levels at the German plant were higher, which would result in an additional cost of USD 120 per vehicle, and that more workers would have to be recruited. On the other hand, they stated that the Spanish plant is not assembling Focus models to the full capacity of the production line and that about 1,000 workers at Almussafes could take retirement or early retirement between now and 2003.

The serious differences of opinion amongst the different unions added to the complications. UGT, which favoured a preliminary agreement, called for the mediation of the Ford headquarters management in the USA. CC.OO was divided internally, with one group close to the position of CGT and one close to that of UGT.

On 22 October, the dispute came to a head. In a videoconference with the workers' representatives, the vice-president of at Ford's Detroit headquarters issued an ultimatum, threatening to close the plant and transfer production elsewhere. The general reaction to this was apparently one of shock: some commentators claimed that it reminded the public of George Orwell's image of "Big Brother" via satellite. The Minister of Industry and spokesperson for the Spanish government stated that threats and coercion were inappropriate as a means of negotiation. From this point on, the efforts at mediation between the local institutions and the social partners intensified.

The agreement

Finally, after a long and tense negotiating session lasting 20 hours, on 31 October the parties reached a draft agreement that was later ratified by the workers at an assembly with 70% of votes in favour. It contains the following points.

• Pay increase. The initial starting point of the unions was to demand a wage increase of 3% for 1998, and of the forecast increase in the retail prices index (RPI) plus one percentage point for 1999. Nevertheless, throughout the dispute the unions made it clear that the pay increase was not a central question. In fact, in the final agreement the increases are lower: wages will rise by 2.6% in 1998, by the estimated RPI (1.8%) plus 0.5% in 1999, and by the estimated RPI plus 0.5% in 2000. The most controversial point, the change in occupational classification from level five to six for production workers (associated with an increase in pay), was left without agreement. The company claims that this upgrading would have involved a 29% increase in labour costs. However, agreement was reached on another of the most controversial aspects, namely the union demand for the backdating of the production bonus to 1 January 1998. The company finally accepted this point - worth ESP 2,500 a month for support staff and ESP 5,000 a month for line workers - in exchange for the unions accepting the programming of six working Saturdays over the rest of the year, in addition to six working Sundays on a voluntary basis. In other words, the unions have finally accepted a longer working week by agreeing to work compulsorily on a limited number of Saturdays and voluntarily on six Sundays. A special bonus of ESP 54,000 for 1998, ESP 55,000 for 1999 and ESP 56,000 for 2000 was also agreed. However, the company has not yielded to the demand to pay wages lost as a result of workers' demonstration at the beginning of 1998.

• Apprentices' school. The apprentices' school (escuela de aprendices), which had traditionally trained the employees' children to prepare them to work at Ford, was another important bone of contention. The unions had asked for the school to be reopened, and for it to accept other relatives of the employees and to prepare them to work not only at Ford but also in its satellite companies. Finally, it was agreed to reopen the apprentices' school for 50 children of employees every year.

• Job creation. The company has agreed to integrate the temporary workers who are currently on fixed-term contracts into the core workforce as the situation returns to normal and production increases.However, the chance to create jobs as a result of producing the 310 Focus units has disappeared. The production of these units has been transferred to Saarlouis. However, the company has agreed to join the unions in asking Ford headquarters to locate the production of the new I4 and I5 model engines in the existing HCS engine plant in Valencia.

• 35-hour week. In October, the unions abandoned the introduction of 35-hour working week, originally raised at the start of negotiations in January, because of the increasing complexity of the negotiations. Finally, an agreement was reached to include a reduction to 36.5 hours a week in the collective agreement for 2001.

• Voluntary early retirement. The agreement specifies that voluntary early retirement will cover all workers over the age of 58, including both administrative and production personnel.

Commentary

This dispute reveals the enormous advantage of globalisation for multinational companies, which can use competition amongst the workers of different countries as a bargaining strategy. Ford arguably obtained an agreement by threatening to close the factory and to transfer the production of the 310 units of the Focus from Spain to Germany. However, the Ford management should also remember that the Almussafes plant has received thousands of millions of pesetas in public funds since it located there over 20 years ago.

The dispute also indicates that similar levels of pay, conditions and employment need to be maintained amongst groups' various European plants, if their European Works Councils are not to be subject to "blackmail" by multinationals. It demonstrates as well the need to establish similar criteria on work organisation, productivity, modernisation and flexibility, which were the main arguments used by the company to emphasise the comparative advantages of the different plants.

Finally, the dispute illustrates the difficulty of negotiating and reaching agreements when union representation is very fragmented: the great internal differences amongst the various unions slowed and even blocked the negotiation process, even though they tried to maintain a certain unity of action. Nevertheless, it must be admitted that in this case the internal differences amongst the unions centred on difficult areas, such as occupational classifications and the 35-hour week. (A Martín Artiles, QUIT-UAB)