Dispute at Ford over new collective agreement
Published: 19 November 2001
Negotiations over a new collective agreement for Ford's Almussafes plant in Spain have broken down in November 2001, in a dispute similar to that which occurred in the last round of bargaining in 1998. The talks have been at a standstill for four months and there may be a threat of the company transferring production in the medium term to new plants in Russia and Turkey.
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Negotiations over a new collective agreement for Ford's Almussafes plant in Spain have broken down in November 2001, in a dispute similar to that which occurred in the last round of bargaining in 1998. The talks have been at a standstill for four months and there may be a threat of the company transferring production in the medium term to new plants in Russia and Turkey.
After four months of bargaining, negotiations over a new collective agreement for the Spanish plant of the US-based motor manufacturer Ford at Almussafes (Valencia) have broken down in late 2001 due to a dispute that is very similar to that which occurred in the last round of bargaining in 1998 (ES9811288F). Bargaining started in June 2001 and three areas of conflict emerged, as follows:
the distance between the parties on pay is not very great, and there may well be a last-minute compromise, as happened during the negotiation of the previous agreement. The Ford workers' committee started by demanding an immediate pay rise of 5%, but later reduced the demand to 4%, plus 1% in 2002 and 2003. The company offered a pay increase of 3.25% and an increase of 0.25% for 2002 and 0.50% for 2003;
an occupational development plan proposed by the trade unions is a major obstacle, as it was in the previous round of bargaining. This plan consists of promotion and higher wages for 2,000 assembly-line workers, which would involve raising them from category 5 to category 6 in the occupational classification system. Ford management is opposed to this, and in 1998's bargaining it considered this point to be non-negotiable; and
working time is also a serious point of conflict. The management wishes to introduce annual calculation of working time, whereas the unions initially called for the introduction of a 35-hour week. They have now given up this demand, but are calling for a working week of 36.5 hours, which in the previous agreement was considered as a 'question to be studied' by the company.
The table below summarises the positions of the company and workers' committee representatives in the Ford bargaining commission on the key issues at stake, along with the relevant provisions in the current 1998 collective agreement.
| Subjects | 1998 agreement | Company | Workers' committee |
| Employment | 430 temporary contracts. | 1,000 new indirect jobs in suppliers. | - |
| Third shift | Study introduction of a third shift. | Intoduction of a third shift. | - |
| Pay | 2.6% in 1998; the increase in the Retail Prices Index (RPI) 0.5% in 1999; RPI increases 0.5% in 2000. | 3.25%, with revision of 0.25% in 2002 and 0.50% in 2003. | 4%, plus 1% annual revision in 2002 and 2003. |
| Working time | - | 1,650 hours per year. Annual calculation of hours to make working time more flexible. | 1,613 hours per year. |
| Flexible working time | 10 Saturdays to be worked per year per worker. | - | - |
| Shorter working hours | 38.75 hours per week Examination of a reduction to 36.5 hours per week | - | 36.5 hours per week |
| Early retirement | Voluntary retirement at 58 years. | - | - |
| Holidays | 27 working days in 1998, 28 in 1999 and 29 in 2000. | - | - |
| Occupational categories | Blocking promotion between categories (from group 5 to 6). | Will depend on the development of needs. | Occupational development plan (in terms of tasks and wages) from group 5 to 6 (affecting 2,000 assembly-line jobs). |
Increasing industrial conflict and threat to transfer production
The bargaining started in June 2001 but came to a standstill one month later, leading gradually to an industrial dispute with intermittent meetings in an attempt to resume the negotiations. The workers' committee called stoppages in July in order to put pressure on the company. This meant that production fell by 3,500 vehicles in this month. The union protests were reinforced by two-hour strikes in each shift on 25 and 27 September. On 18 October, the trade unions called a strike of four hours per shift, followed by a demonstration through the streets of Almussafes. It had been planned to celebrate the plant's 25th anniversary at this time, but the workers' committee decided to boycott the celebrations. On 25 October, the workers' committee called a 24-hour strike, which was widely followed by the workforce.
The strikes were called by the Trade Union Confederation of Workers' Commissions (Comisiones Obreras, CC.OO) and the radical General Confederation of Workers (Confederación General de Trabajadores, CGT) and Unitary Platform of Workers (Plataforma Unitaria de Trabajadores, PUT). The General Workers' Confederation (Unión General de Trabajadores, UGT), which has the greatest number of delegates on the workers' committee but lacks an absolute majority, has taken a more moderate position in the negotiations.
In the most recent trade union elections (ES9902298F) at Ford - held in 1999 after the 10-month industrial conflict in 1998 - UGT increased its representation on the workers' committee from 14 to 15 delegates, whereas the more radical trade unions such as CC.OO and CGT were 'punished' by the workers in the ballot. CC.OO's representation fell from 10 delegates to seven and CGT's from six delegates to five. The other radical trade unions, the Regional Union of Valencia (Sindicato del País Valenciano, SPV), and PUT, maintained their representation, at three and two delegates respectively, as did the management Union of Ford Administrators (Sindicato de Administrativo de Ford, FAMIF). One of the main problems at the company is arguably the fragmentation of the representation on the workers' committee, which has been a continual source of litigation between the trade unions, and has been an obstacle to bargaining.
In July 2001, the chair and managing director of Ford Europe stated very bluntly that industrial conflict 'is becoming normal in this type of negotiations, but it is a very immature way of solving the problems. It is not a sophisticated relationship. I am not saying we do not have the same problems in Germany, but there they are solved; in Spain every three years we are back to the same. Disputes are beginning to be routine and we are concerned that in the long term bargaining will be impossible' (quoted in the Cinco Días newspaper on 5 July 2001).
In September, there was a rumour that Ford Europe was studying an alternative to the Valencia plant for the production of future models because of the high level of industrial conflict. The possible alternatives could be Russia and Turkey, where Ford has recently established production plants. Therefore, on 19 September representatives of the Spanish workers' committee travelled to Cologne to talk to the company's European vice-president for production and human resources director. The managers told the trade union representatives that production at Almussafes is guaranteed in the short and medium term and that there is an investment plan to produce the new Ford Fiesta and a Mazda model there. However, there are no long-term guarantees to produce new models, due to the plant's unstable industrial relations and the long process of bargaining over new agreements.
The standstill in the Almussafes negotiations also led the President of the Generalitat (regional government) of Valencia to intervene. As in 1998, the President of the regional government met representatives of the majority trade unions (UGT and CC.OO) and of the company.
Ford's plans for Almussafes
It seems that the management of Ford Europe is offering short-term guarantees of an investment plan for Almussafes, as stated repeatedly in July and September 2001, but that there are no guarantees of producing new models in the long term. In the short term, the multinational plans to invest USD 300 million (ESP 58.5 billion) in Almussafes to produce the new Fiesta model, in addition to a new model of the Japanese Mazda (in which Ford has a shareholding), on which production should start in the last quarter of 2001.
Despite the industrial conflict, the Ford plant at Almussafes is considered by the company to be a 'flex factory' due to its high degree of versatility to produce different models. This plant currently produces the Focus and the Ka. The Cologne plant has similar characteristics, so it will also produce the new Ford Fiesta. The production of the same model in two different plants is a business strategy for avoiding dependence on a single plant. Ford has other plants in Europe - in Saarlouis (Germany), Genk (Belgium) and Dagenham (UK) - though apparently with less flexible production processes.
The planned investment at Almussafes involves public subsidies of ESP 2.6 billion (which are being studied by the European Commission). This investment will be used to extend the body-shop, instal new equipment (450 robots) and increase the number of suppliers. It is estimated that this will create 1,000 new jobs. The company plans to introduce a third shift, which will make it possible to absorb part of the workforce of the HCS engine factory when it ceases production in July 2002, and to raise production from the current 1,600 to 1,800 vehicles per day.
Commentary
'Disorganised industrial conflict' is typically associated with the fragmentation of trade union representation, which makes it difficult to coordinate and unify the interests of workers. This fragmentation of representation is a feature of representation systems based on support for trade unions in workforce elections, which involves competition between the different unions seeking to achieve hegemony. In many cases, this model of trade union representation leads to a type of industrial conflict during the bargaining process which is partly ritual and symbolic but makes it difficult to achieve rapid agreements. However, the delay in reaching an agreement does not mean that the industrial relations are less stable. Such disputes may also contribute to stability and cohesion in the medium and long term, through stronger agreements and a commitment to develop their content. This seems to be the case at Ford Almussafes, where every three years a dispute arises over the renegotiation of the collective agreement. Despite the difficulties, the European management of the multinational has continued to invest in the modernisation of the plant.
On the other hand, 'organised industrial conflict' is that in which a greater homogeneity of trade union representation facilitates bargaining and rapid agreements. This model is characteristic of representation systems with a single trade union on the workers' committee/works council, as in Germany, where apparently there is less industrial conflict. However, this does not necessarily mean more stable industrial relations.
These two models of industrial conflict are probably one of the obstacles facing European Works Councils in multinationals, in their attempts to coordinate and articulate trade union action in different countries. (Antonio Martín Artiles, QUIT-UAB)
Eurofound recommends citing this publication in the following way.
Eurofound (2001), Dispute at Ford over new collective agreement, article.
