After a long and bitter struggle on the part of Henry Ford against cooperation with organized labor unions, Ford Motor Company signs its first contract with the United Automobile Workers of America and Congress of Industrial Organizations (UAW-CIO) on this day in 1941.
In 1935, President Franklin D. Roosevelt's allies in Congress passed the landmark National Labor Relations Act--also known as the Wagner Act, after one of its authors, Senator Robert Wagner of New York--which established workers' rights to collective bargaining and attempted to regulate unfair practices by employers, employees and unions. By 1937, after successful sit-down strikes (during which the workers remained inside the factory so that strikebreakers were unable to enter) both General Motors and Chrysler had made deals with the fledgling UAW, and Ford was the lone holdout against the unionization of the auto industry.
Edsel Ford, president of Ford Motor, recognized that the Wagner Act had made unionization inevitable, and tried to reason with his father. The elder Ford, who despised labor unions, instead put his trust in Harry Bennett, head of Ford's Service Department, who promised to keep the unions at bay. In the much-publicized "Battle of the Overpass" on May 26, 1937, Ford henchmen brutally beat several UAW organizers (including Walter Reuther and Richard Frankensteen) attempting to hand out leaflets at Ford's River Rouge plant. In the aftermath of this incident, Ford Motor Company was found guilty of violating the Wagner Act, and in early 1941 the National Labor Relations Board ordered the company to stop interfering with the union's attempts to organize.
On April 1, 1941, a walkout by Ford workers protesting the firing of several union members closed down the River Rouge plant. The strike inflamed racial tensions, as many African-American Ford employees returned to work before their white colleagues, breaking the strike. Though Henry Ford had initially threatened to shut down his plants rather than sign with the UAW-CIO, he changed his position and signed a contract with the union that June 20. Ford's change of heart was reportedly due to the urging of his wife, Clara, who feared that more riots and bloodshed would result from her husband's refusal to work with the unions and threatened to leave him if he did not sign the contract.
Paradoxically, Ford gave its workers more generous terms than had either GM or Chrysler: In addition to paying back wages to more than 4,000 workers who had been wrongfully discharged, the company agreed to match the highest wage rates in the industry and to deduct union dues from workers' pay.