Pact on employment and competitiveness at Ford

Workers and managers at Ford’s manufacturing plant in Spain have reached agreement on what is effectively a pact on employment and competitiveness (PEC). This follows a series of temporary dismissals that took place in 2012 in an attempt to cut costs in response to the drop in demand in the automotive market. In the new agreement, employees have accepted a wage freeze for the duration of 2014. In return, the plant’s night shift, suspended in 2009, is to be reinstated creating 1,000 new jobs.

Background to the new collective agreement

The previous collective agreement between managers and workers at Ford’s manufacturing plant at Almussafes, in Spain’s Valencia region, was signed in 2007 by only one of the four unions represented on the workers’ committee, the General Workers Confederation (UGT).

The other unions said the agreement made working conditions worse, and it failed in 2009 to prevent the suspension of the night shift which led to the dismissal of 600 employees (see ERM Fact sheet 14394).

Early in 2013, UGT representatives at the plant opened negotiations on a new collective agreement with managers. Representatives of the Trade Union Confederation of Workers’ Commissions (CCOO) from the plant also joined the process.

The previous collective agreement was still in force. However, there had been a series of temporary dismissals in 2012 as the plant underwent further restructuring, largely because the motor vehicle manufacturing sector has been hit hard by the economic crisis in recent years. Negotiations for the new collective agreement mainly focused on how to improve the plant’s competitiveness.

Pacts for employment and competitiveness

Pacts for employment and competitiveness (PECs) are collective agreements at the organisational or local level that simultaneously deal with employment and competitiveness issues. Normally found in large companies and especially those undergoing restructuring, they emphasise a ‘partnership’ approach in collective bargaining and may cover a variety of topics, such as guarantees of employment, additional employment creation, reduction in pay levels and so on.

Since the new agreement for the Ford plant at Almussafes explicitly links the creation of 1,000 jobs to wage freezes, it can be considered to be a PEC.

Content of the new agreement

The new agreement, which is supported by 69% of the employees at the plant, will come into force in 2014 and be valid until 2018.

Wages will be frozen for the duration of 2014. Then, between 2015 and 2017, wages will be increased by the official inflation rate plus 0.5%, and in 2018 by inflation plus 1%. In return, the unions have accepted the loss of 985 of the 6,500 jobs at the plant through an early retirement scheme.

About 1,000 new jobs will be created in the next few months with the reinstatement of the night shift, but the new workers will be hired on lower wages. The company has also made a commitment to give permanent jobs to temporary workers.

Pablo Sanz, CIREM Foundation

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