The UAW rank-and-file rejected a labor pact with Ford (NYSE:F) even though the car company offered each member of the union $1,000 to agree to the deal The No.2 US auto company now has to deal with the bitter fruit of its own prosperity. Ford has done much better financially than its government-supported rivals GM and Chrysler over the last year and has probably picked up market share on every major car company, foreign or domestic, that has a major presence in the American market.
Many analysts believe that Ford made money in the third quarter of the year which is close to a miracle given the bog that the car industry has been in for two years. Ford has over $20 billion in cash on its balance sheet even if its cash burn in Q3 was $3 billion, and it probably was not.
Ford’s stock is up about 250% over the last year while shares in powerful Japanese rivals Toyota (NYSE:TM) and Honda (NYSE:HMC) have made much more modest gains.
The union knows that Ford cannot whether a strike that would threaten its new-found success. The company is going to offer a lot more than $1,000 a man to get a new agreement. UAW workers are eyeing that $20 billion in Ford’s pocket.
Douglas A. McIntyre
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