Ford had a rough quarter. A half-a-billion-dollar loss and big questions about whether it made a bad bet about the transition to electric vehicles. The company is looking to save some money, and what’s one way it might do that? Offshoring!
Speaking at the Wolfe Research Semiconductor Conference, CEO Jim Farley made what some might consider threatening comments about the future of his company’s U.S.-based, United Auto Workers-represented manufacturing workforce.
“Ford had always prided itself on not having a strike since the 70s, which we didn’t,” he said. “I have the best relationship with 57,000 UAW workers far beyond the other competitors.” But then, when Ford couldn’t come to an agreement on the terms of its contract with the union — companies with unions are mandated by law to bargain over things like pay and benefits — Ford’s workers went on strike, starting things at one of the automaker’s crucial truck plants. Now, Farley is rethinking that relationship.
“We make 100% of our trucks with UAW workers in the U.S.,” he said. “Our competitors do not do that. They went through bankruptcy and they moved production to Mexico and other places. And so it’s always been a cost for us, and we always thought it was the right kind of cost.” Not anymore.
A heavy think
Farley said that things weren’t as tense at Ford’s electric vehicle battery factories, which until recently operated largely outside of the company’s labor agreements. That their workers weren’t covered by the UAW contract was a big sticking point. Farley went so far as to say that the union was holding contract negotiations “hostage” because it insisted that the battery workers be covered by the same agreement as other manufacturing employees.
When an agreement was eventually struck that returned UAW members to their jobs, part of the deal was that battery workers would have a pathway to UAW membership. UAW president Shawn Fain told Bloomberg in November that he predicted “strife” at Ford’s plants if the company blocked that pathway. But at the semiconductor conference, Farley sounded like he might consider avoiding the issue entirely.
“As we look at this EV transition, and its lasting longer and our truck business being more profitable, you know, we have to think carefully about our footprint,” he said.
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