Ford EWC and management sign pioneering agreement on Visteon employees

In January 2000, the management and European Works Council (EWC) at Ford signed an agreement regulating the conditions to apply to employees of Visteon, Ford's components operation, in the event of it becoming independent. This is thought to be the first time that an EWC has been accepted by the management of a multinational company as a bargaining partner in this way.

On 25 January 2000, the management of the Ford automobile manufacturing company in the USA and Europe, together with its component firm, Visteon, signed an agreement with the Ford European Works Council (EWC) and European employee representatives, relating to the employees of the European Visteon factories. This is though to be the first time that an EWC has been accepted by the management of a multinational company as a partner for bargaining and the signing of an agreement on such substantive issues. The agreement has become legally binding after the conclusion of additional national agreements by works councils and similar bodies in each country concerned.

In mid-1997, all Ford-owned component-supply factories worldwide, producing axles, steering mechanisms and other technical parts, were united into a single group which was named the Automotive Product Operation (APO) and subsequently renamed Visteon. It was obvious that this was the first step towards creating an autonomous component-supply company. Subsequently the German Ford factories in Berlin, Düren and Wülfrath, as well as four UK factories at Belfast, Basildon, Enfield and Swansea and the company's technical headquarters were integrated into the Visteon organisation. The headquarters of both the Ford Motor Company and Visteon are located in the USA. Although Visteon is legally still part of Ford's national subsidiaries, central management in the USA treats it as an independent company and does not involve the German subsidiary Ford-Werke AG or the UK subsidiary Ford Motor Company Limited in Visteon investments or orders. It has continued planning to spin off Visteon, which is now one of the largest suppliers to the automobile industry, as an independent company and float it on the stock exchange.

Employees and their representatives expressed concerns about these plans, and the Ford EWC drew up a strategic position concerning the planned spin-off in early summer 1999. Together with representatives of the US United Auto Workers (UAW) trade union, a common line of action was decided in July 1999. After several weeks of discussion with Ford management, UAW signed a collective agreement which guaranteed protection of existing rights and conditions of employment for the US employees of Ford Visteon. The EWC subsequently decided to seek to extend this agreement to the European production sites. An agreement to this effect was concluded on 25 January 2000 (which differs from the US agreement in that it also covers white-collar workers, who are not represented by UAW in the USA).

The key points of the agreement with the EWC are as follows:

• all Ford employees who transfer to Visteon in the event of a spin-off will be guaranteed, for the rest of their working lives, the pay and extra payments laid down at Ford. This is also the case for pension rights;

• detailed provisions on sourcing guarantee the purchase of Visteon parts and components by Ford, not only ensuring the further existence of Visteon and the widening of production lines - and thus competitiveness - but also providing employment guarantees;

• employees' length of service will be taken fully into account in the event of the spin-off of Visteon. Employee benefits - such as car or share purchase schemes - comparable to those at Ford are to be developed and introduced at national level;

• all employees working at Visteon at present can decide if they want to stay at Ford until Visteon becomes legally independent. In this case they will receive job offers from Ford;

• employees wanting to switch to Ford after the legal independence of Visteon can apply for vacancies at Ford, and will be given preference over external candidates;

• existing company agreements and other collective agreements – especially concerning employment guarantees and training programmes - are to be fully adopted by Visteon;

• in Germany, Visteon is to become a member of the employer's association for the metalworking industry. Accordingly, collective agreements signed with theIG Metall metalworkers' union will be valid in each factory. There will be similar regulations for other countries;

• Visteon is to have its own EWC. Furthermore, in Germany the company works council at Ford and the future company works council at Visteon are allowed to attend each other's sessions and hearings relating to economic matters;

• in the event that parts of the new Visteon group in Europe are sold off, potential new owners are obliged to adopt this agreement; and

• the EWC and Ford management are to set up a joint team to monitor the observance of the agreement and make decisions on its interpretation in the event of a dispute. This should ensure that Visteon cannot depart from the agreement.

About 77,600 Visteon employees worldwide are covered by the agreements, of whom 52,000 work in the USA and 19,800 at 26 European production sites, including about 3,966 in four German factories. New Visteon employees following independence will be employed under conditions set at Visteon, which might differ from agreements at Ford (such as the 1997 German works agreement to secure investment -DE9704209N).