agent Entrepreneur logo
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

F&Iby Lauren LawrenceFebruary 27, 2026

Price Driving Insurance Churn

Over half of insurance holders ages 18 to 29 reported to be 'somewhat' likely to change providers in the next 90 days, according to CivicScience, which found that interest was lower among older age groups.

Read More →
Industryby Lauren LawrenceFebruary 26, 2026

AI Drives Dealer Website Traffic

Total visits to dealer websites from generative artificial intelligence platforms grew more than 15 times year-over-year, signaling a shift in how many consumers shop for cars online.

Read More →
Industryby Hannah MitchellFebruary 26, 2026

Automakers Tops in Fuel Economy

In the U.S., Honda has the most efficient gas-electrified combo lineup while Tesla beats all automakers in annual EPA ranking as brands built their alternative-fuel offerings.

Read More →
Ad Loading...
F&Iby Lauren LawrenceFebruary 25, 2026

Report Finds Year-End F&I Strength

Deal volume ebbed and flowed throughout 2025, but product performance remained steady, according to automotive technology and data intelligence solutions provider StoneEagle.

Read More →
Industryby Hannah MitchellFebruary 24, 2026

Overall Consumer Confidence Up

Americans’ view of present business conditions, the labor market and family finances, though, are still in the dumps, and if they plan to buy cars, many target used units.

Read More →
Auto Financeby Lauren LawrenceFebruary 23, 2026

Auto Loan Forecast Bucks Market Trend

Auto loan originations rose over 6% year-over-year in the third quarter of 2025, but TransUnion predicts a slight decline in auto loan growth this year, making it an outlier in the company's overall lending forecast.

Read More →
Ad Loading...
F&Iby Hannah MitchellFebruary 23, 2026

Some Auto Brands Cheaper to Insure

A new top 10 list ranks the least expensive for average full insurance coverage on a clean driving record and high driver credit scores.

Read More →
Industryby StaffFebruary 20, 2026

Learn to Manage the Mayhem at Agent Summit

Rob Mancuso – president of Mancuso Automotive – will present a Keynote at the 2026 event.

Read More →
Fixed Opsby Hannah MitchellFebruary 20, 2026

Auto Recalls Sank Last Year

2025 Sedgwick data indicate that the number of vehicles affected fell to its lowest point in more than a decade.

Read More →
Ad Loading...
Industryby Lauren LawrenceFebruary 19, 2026

Affordability Leads Top-Rated List

Edmunds’ editorial team tested 300-plus vehicles to help determine the Top Rated Awards for 2026, and one brand stood out with multiple rankings, including Best of the Best.

Read More →