Ford Motor Co. has become the second Detroit auto maker to arrive at a deal with the United Auto Workers union. While still pending ratification by UAW union members, the deal will stretch over four years and cover 41,000 Ford employees in the U.S. The UAW and General Motors arrived at a new labor deal last month trading higher wage figures and benefits for entry-level job openings. Chrysler Group LLC continues to be at a standstill with the UAW and contract negotiations.
“It’s our opportunity for bringing in new people,” John Fleming, Ford’s manufacturing and labor chief said to Automotive News. “[The jobs] will help us with our overall labor costs by hiring Tier 2 people.”
The two-tier working system has long been a point of friction among UAW workers and the auto makers themselves. Some of the younger UAW workers have been unhappy about doing the same amount of work but being paid less than veteran workers. Ford has fewer workers who earn the lower, entry-level salaries compared to UAW veteran workers than GM and Chrysler.
As part of the deal, Ford will add around 12,000 hourly jobs at U.S. facilities, insourcing jobs from Mexico, Japan, and China. However it also includes 6250 positions that have already been announced and are expected to be filled by existing and entry-level workers.
“As the nation’s economy remains stalled and uncertain, and its employment rate stagnates, we were able to win an agreement with Ford that will bring auto manufacturing jobs back to the United States from China, Mexico, and Japan,” UAW President Bob King said in a statement to Automotive News.
In the new agreement Ford says it will invest $16 billion for the assembly of more vehicles in the U.S. That number includes $6.2 billion in investments delegated for assembly plants.
The deal is also expected to save employees at the Flat Rock assembly facility in Michigan from being laid-off when production of the Mazda 6 will soon be moved to Japan. The Detroit News is reporting certain models of the Lincoln MKZ and Ford Fusion will take the 6′s place for production at Flat Rock.
As was the case in the pact between the UAW and GM, expect to see Ford employees receive an expanded profit-sharing program and a “generous” signing bonus. The numbers will depend on the health of the company but UAW leaders have high hopes for Ford after the auto maker was able to post a $2.7 billion profit in 2009 and $6.6 billion profit in 2010. This is an impressive turnaround after posting a combined $30 billion in losses from 2006-2008.
Automotive.com’s take: Expect to see more details as well as possible product plans to leak as both Ford and the United Auto Workers union creep closer to ratifying the deal.
Source: Automotive News, The Detroit News