Gm May Balk At Ford Contract Minimum Work Force Provision Hard For Automaker To Swallow

The national labor contract Ford Motor Co. managed to negotiate with the United Auto Workers is guaranteed to cause problems for its bigger cross-town rival, General Motors Corp., if the union forces GM to accept the same terms.

The UAW and Ford reached tentative agreement Monday on a new three-year contract that would establish a minimum work force level for the first time in the auto industry.

According to union and company sources, the world’s second-largest automaker agreed to maintain at least 95 percent, or about 100,000, of its 105,025 UAW jobs.

“It doesn’t present a great risk for Ford,” said Nicholas Lobaccaro, an analyst with Bear, Stearns & Co. in New York.

Ford, which has largely completed its downsizing, can afford such a deal because its staffing already is lean. About 15 percent of its vehicles are being produced on overtime, and the automaker is adding workers to meet the strong demand.

Even if the economy slowed, Ford could cut back on overtime and extra shifts. Chrysler, which like Ford has been adding workers, probably could live with a similar job guarantee. Officials there were reserving comment until they see the contract.

But GM’s in the middle of a reorganization and downsizing to catch up with its more efficient competitors. By some estimates, the automotive behemoth needs to eliminate 50,000 to 70,000 of its 215,000 union jobs and is looking to sell off some of its unprofitable parts plants.

It also is preparing to manufacture several redesigned models that require far fewer workers to assemble.

If GM were forced to accept a 95 percent job guarantee, “You’d be talking about effectively preventing a restructuring of the company to a great degree,” Lobaccaro said. “They’d be confined to a reduction of their work force by only about 10,000.”