Ahead of the start of contract negotiations tomorrow, Ford and the United Auto Workers (UAW) union have been engaged in a bit of a public war of words, with the UAW releasing a scathing video aimed at what it calls “bloated” CEO pay amid soaring profits. Ford CEO Jim Farley followed up that release with an op-ed discussing several wage-related issues, which the UAW then responded to with its own take on that matter while also providing its top three goals – stronger job security, the end of tiered pay systems, and the return of a cost of living adjustment that was eliminated years ago. However Ford is firing back by claiming that it has a one billion dollar labor cost disadvantage in the U.S. compared to its rivals, according to Automotive News.
This gap comes courtesy of the fact that Ford reportedly manufactures 80 percent of its vehicles in the U.S., and it also employs the most UAW workers of any automaker – 57,000 – which is around 11,000 more than General Motors and 16,500 more than Stellantis. The Blue Oval has also added or retained 14,000 UAW jobs since 2019, which is 5,600 more than it committed to in its most recent contract with the union.
That involves spending $1.4 billion more than expected from its current contract, as well as converting 14,100 temporary workers to permanent status. Currently, temp workers make up around three percent of Ford’s total hourly workforce, which is far less than the eight percent required by the contract, as well as much lower than GM and Stellantis, reportedly. Ford notes that compared to international automakers with no union employees, it has a $9-an-hour labor cost gap to contend with, too.
This is yet another obstacle The Blue Oval faces after it posted a disappointing profit performance in 2022 and is seeking to trim $8 billion in costs. Earlier this year, CFO John Lawler revealed that the automaker has a $7-$8 billion dollar total cost gap when compared to its rivals, roughly half of which comes from materials costs.
We’ll have more on the ongoing negotiations between the UAW and Ford soon, so be sure and subscribe to Ford Authority for 24/7 Ford news coverage.
Comments
This is what happens when a can is kicked down the road again and again for the sake of wanting to appear to be UAW’s champion while being prevented from ever building competitively ar home.
Quote: “Currently, temp workers make up around three percent of Ford’s total hourly workforce, which is far less than the eight percent required by the contract, as well as much lower than GM and Stellantis, reportedly. ”
Not required. ALLOWED. The contract allows up to 8% total company wide and up to 10% per a location as needed. I have read the contract many times and still do occasionally.
Really? This is a subscription service for the auto maker Ford based in the US followed by the many to keep up with news & changes with the company & to keep up with the new cars to be manufactured now & in the future. We look forward to owning one that fits our needs. Why are you reading on this blog.
Disappointing profit performance? If they would stop cramming all those F-150s on the lots and start making my damn Maverick I placed a deposit on over a year ago, Ford just might have more profits.
Recall Motors (FoMoCo) also has a huge recall cost disadvantage due their endless recalls under Failure Farley.
I’d say most of the content of this article is factual but what it leaves out is that cost gap was higher when the foreign automakers hit the stage and continues level out because the demands of competing in the US labor market they (Nissan Toyota ect. Has forced them to offer compensation comparative to the big 3. There is much to be proud of in that through the efforts of the UAW and the big three thru contracts they have reversed much of the race to be bottom in the auto industry while leaving them competitive and profitable and there’s still so much work to done.