UAW Vice President Jimmy Settles, left, President Dennis Williams, center left, Ford Chairman Bill Ford Jr., center right, and Ford CEO Mark Fields kick off the contract talks between the two sides.
As expected, the ceremonial handshake between Ford Motor Co. and UAW negotiators was a mix of optimism and reality with Dennis Williams bringing the latter to fore right away.
“Mexico continues to be an issue for us,” Williams said during his comments kicking off the talks. “I want everything to be built in the United States, including tennis shoes.”
Mexico is an issue because Ford recently announced it would be moving production of the slow-selling Ford Focus and C-Max from their current plant in Wayne, Michigan, to an unnamed facility.
Ford in April said it was investing $2.5 billion in the Mexico for a new engine and transmission plant, thus it became the most likely option where the two vehicles will land. While putting on its best smile, the UAW said production of the vehicles were being moved to Mexico, but that they were confident there would be something taking their place at the Michigan plant.
Executives for the automaker at the time and again today declined to confirm where the two vehicles will be built. However, they did say there were no plans to close any plants, implying that a new product will come to the Wayne plant.
However, one product that won’t be coming is the new Lincoln Continental. Officials recently confirmed it will be headed to manufacturing facility in Flat Rock, Michigan, that produces the Ford Fusion and Mustang. There have been rumors floating that the automaker is considering bringing back an old name, the Torino, in the near future.
The Wayne plant won’t lost Focus and C-Max until 2018, which would give the automaker plenty of time to complete the design of and produce the tooling for the rumored Torino. However, Ford officials stuck to the company line.
(Move to Mexico makes Ford potential UAW target. For more, Click Here.)
“We have to look at our overall footprint, and how we can best improve overall profitability for the company,” said John Fleming, executive vice president of manufacturing and labor affairs for Ford.
“Mexico is part of the footprint, China is part of the footprint, Thailand is part of the footprint. We’re going to continue to look not at what’s best for the global business, but what’s best for the North America business.”
(Click Here for details about GM-UAW contract negotiations.)
Ford is not alone in eyeing Mexico. General Motors announced plans to invest $3.6 billion through 2018 in Mexico, seeking to double its production capacity there.
The problem with Mexico is profound for the UAW president. Williams is so concerned about the impact that Mexico is having on U.S. workers, he discussed it last Friday with U.S. Labor Secretary Thomas Perez and President Barack Obama at the White House. He told the pair that free trade agreements are hurting U.S. manufacturing.
(Friendly FCA-UAW handshake makes tough task ahead. Click Here for the story.)
He said the had a plan to help Mexican workers, but declined to elaborate on it, saying only, “They’ve got good laws that they don’t enforce.”
It should be a big issue. There is no rational reason to move U.S. car production out of the U.S. I believe major auto makers should manufacture and sell the cars in the country where produced.
Every time I read these stories I think about the Forbes article this past year noting it had been 25 years since there had been any net hiring inside the USA across the top 10 US Multinational companies. And then about two guys I was walking behind across the big square in Prague, as one of them revealed he had just been laid-off, as his company’s sales edged downward; “The way we have to compete with the east, Czechs can’t afford to buy they things we make any more because wages are falling.” I also saw more Ferraris in Prague in a week than I see in Rome in a month. Clearly its like here, with plenty of money, but only for those at the top.
The handwriting is on the wall for unions. The advent of non union auto assembly plants in the USA, which, by the way, was the union’s doing, has simply made it a fact that unions aren’t required for the production of US built vehicles. I never could understand why employees wished to pay a middleman to negotiate contracts for them. The unions’ and their management have gotten fat on employees dues. If the USA wishes to compete auto workers and management have to come together to create the most efficient ways to produce vehicles. If it takes two tier wages so be it. I’m certain that the junior employees making $16.50 per hour would rather be working than unemployed. On the other hand, there’s no reason why the employees shouldn’t participate in the growth and profitability of their employers. Has any organization performed a study on the additional cost added to a vehicle manufactured in the USA due to union membership? I’d love to read such an unbiased report if one exists.
You seem to be confused about what Unions are and do. A union is comprised of laborers, some of whom represent the group in negotiations with the company. Secondly Union dues are used to pay a salary to those who do the negotiations but more importantly dues are used to provide a subsidy if a Union member loses their job due to the whims of management. Good Union leadership also makes sure that the employer follows federal regulations regarding working conditions, hours, compensation, etc. The only reasons Unions exist is to eliminate the exploitation of labor by the employer. Your naïve belief that Unions and their management are getting “rich” off of members dues is ignorant and meritless.
If an employer treats it’s employees fairly all the time then there is rarely a need for a Union. On the other hand when an employer pays workers in the Southern U.S. $16.50/hr. when they should be paid ~$25/hr. this creates a cost savings for the employer but it lowers the standard of living in the country. Naturally people would prefer working in a modern factory for $16.50/hr. vs. a grocery store for $8/hr. but that does not mean that it’s an ethical decision to under pay these people. In addition when a state provides tens of millions of dollars in “incentives” to a company to locate their facility in that state, all tax payers in that state pay more taxes to compensate for the taxes the company is not paying. There is only a minor difference in the cost of living between Detroit and the Southern U.S. so there is little justification to under pay these workers. By doing so these companies are keeping a specific class of people and a geographic area in economically depressed by under paying these workers while the company profits from this discriminatory practice. It’s worth noting that VW Ag actually is encouraging a Union in their CHAT manufacturing facility. This is because they want labor to have direct input into the compensation package as well as cooperation in manufacturing new products in the CHAT facility. VW Ag has learned the hard way after decades of pouring billions of Euro into Mexico that it is a very unstable economy and difficult environment to obtain technically skilled workers or train them. CHAT offers VW Ag a much better situation than Mexico but VW is stuck now in Mexico due to their capital investment.
BTW, I am not nor have I ever been a Union member. But I do understand why they exist and it’s to protect workers from unscrupulous employers. As we saw with GM and Chrysler’s bankruptcy proceedings, many laborers lost their jobs, dealerships were closed, retirees lost their pension benefits but no one in management actually took a compensation cut even though management was responsible for the bankruptcy, not the laborers.
The U.S.A. is the land of financial greed at the executive level. Auto manufacturers will beat down every supplier for a penny a part and then pay their CEO ten times what CEOs in other countries running similar companies get paid. A perfect example of greed and incompetence is Marchionne getting $30 million per year for running Fiat/Chrysler into debt they can’t pay. Why do CEOs get big pay when they ruin the company but labor is expected to take it on the chin and sacrifice to save the company time after time? The only reason most goods made outside the U.S. are no longer made in the U.S. is because big companies employ the lowest cost labor and do not need to comply with proper working conditions and safety regulations in third world countries.
Apple is a perfect example as they use a dollar per day labor in China to produce their products sold in the U.S. and elsewhere. That results in Apple having outlandish profit margins deliver off the backs of exploited Chinese workers who are routinely beaten if they refuse to work less than 12 hours per day six days per week. These workers reportedly only get three days off from work per year. They sleep in company barracks and are guarded so they are unable to leave.