Labor Laws and Unions Ford Motor

The Ford Motor Company is the largest automobile manufacture in the world. The company later became unionized. The subject of this paper is to identify legal issues and obstacles that the Ford Motor company could encounter, determine which federal, state, or local laws could be broken because of the legal issues and why and provide recommendations of minimizing litigations.

Labor Law and Union: Ford Motor CompanyThe Ford Motor Company was established by Henry Ford in Dearborn, Michigan, in 1903 (Bellis, 2012). With the use of the first assembly line, Ford became known for the development of mass production. Henry Ford gained notoriety by shortening the workday of his employees, paying his workers high wages and believing unionization was not necessary (Bellis, 2012).

On June 20th 1941 the Ford Motor Company signed its first contract with the United Automobile Workers of America and Congress of Industrial Organizations (UAW – CIO) (“Ford Signs First Contract With Autoworkers’ Union,” 2012). The Ford Motor company employs about 164,000 people and recorded revenues of $136,264 million during the financial year ending December 2011 (Research & Markets, 2012.) Legal Issues and Obstacles Ford Could Encounter

The Ford Motor Company could encounter legal issues and obstacles on the employment laws. It is unlawful for management to discriminate in employment because of union activities (Cascio, 2011, p. 517). Ford Motor Company is the largest automobile manufacturer in the world in which union and non-union workers are employed. The Ford Motor company must adhere to the Equal Employment Opportunity law in hiring and promoting workers. The management at Ford Motor Company must follow contract laws in that the company has signed a labor contract with the union.

Employees should have the right to have a bargaining agent and The National Labor Relations Act of 1935 established collective bargaining in labor-management relations and limited management interference in the right of employees to have a collective bargaining agent (National Labor Relations Board, 2012). Because there is potential for safety issues with this company the Ford Motor Company could protect its employees by following the safety standards and requirements set by the Department of Labor’s Occupational Safety and Health Administration (OSHA). It is important for the Ford Motor Company to comply with the laws. Recommendations of Minimized Litigation

Establishing a legal and human resources department to organize, communicate, and help employees understand how the laws are applied, monitored, and regulated can help the Ford Motor Company minimize possible litigation. The Ford Motor company must also continually train all its employees on the laws and the compliance of the laws. However, listening to the guidance and counsel of individuals who have been expertly trained the laws in which the company is subjected; the company will take the most important step in minimizing litigations. Benefits of Joining a Union and the Unionization Process

Higher wages, better health care, and access to pension plans are the benefits that Ford employees have experienced after unionizing. The benefits have led to lower turnover rates, higher loyalty, and dedication from employees, and increased product innovation. Although these benefits were hard to identify during the downturn in the economy, Ford bounced back to a profit over its competitors, increase job opportunities, and return key manufacturing jobs to America (Associated Press, 2011). The Union Process

According to Cascio, the unionization process is complex, but has well defined rules that govern organizing activities, which include allowing employee organizers to solicit fellow employees on company premises but not during working time. Prohibiting outside organizers from any on premises soliciting if a company has an existing prohibition solicitation policy and the policy has been consistently enforced and allowing company management representatives to express their views about unions on company premises without interfering with the process (p. 518).

Cascio states the organizing union can petition the National Labor Relations Board (NRLB) for a representation election (p. 518). Cascio concludes if the organizers can obtain signatures of 50% or more of the employee workforce, the union is allowed to ask for exclusive NRLB representation of the voting process, which involves employees casting his or her votes through the use of secret ballots consisting of a “yes” or “no” answer (p. 518). Organization unions bargain through the use of a process called collective bargaining. According to Cascio, collective bargaining is a two-party negotiation process between employers and employee representatives with the goal of resolving a conflict (p. 522). Union Bargain

Although union membership and collective bargaining can be beneficial to employees, they can have a negative impact on an organization, if that organization is unionized, or not (Cascio, 2010). Collective bargaining agreements provide increased wages, better health benefits, and generous pension plans to union members. However, these agreements do not apply to non-unionized employees. This could result in a disparity of wages among employees completing the same jobs with similar skill sets. Effects of Union Bargaining

A unionized organization may be required to continue the employment of any number of union members during slow business, economic difficulty, slow business cycles, or when budgets need to be trimmed, and this can affect an organization’s financial position with respect to its competitors and the marketplace. Conclusion

The Ford Motor Company has embraced the process and understanding of the legal constraints that the union can have on an organization. Ford has learned to work with the union and have learned through previous mistakes to adhere to the legal constraints involved with doing business in America and around the world.


The Associated Press. (2011). The Bottom Line. Retrieved from http://bottomline.msnbc.msn. com/_news/2011/10/19/8396861-ford-union-workers-ratify-new-contract.

Bellis, M. (2012). Henry Ford (1863-1947). Retrieved from Cascio, W. (2010). Managing human resources: Productivity, Quality of Work Life, Profits (8th ed.). New York: McGraw-Hill.

Ford signs first contract with autoworkers’ union. (2012). Retrieved from union

National Labor Relations Board. (2012). National Labor Relations Act. Retrieved from

Research and Markets. (2012). Ford Motor Company – SWOT Analysis. Retrieved fromhttp://Ford Motor Company – SWOT Analysis