Ford Motor Co. was the first to submit a contract proposal to the UAW and Ford is now the first to draw the line on its wage increase offer, which stands at 23%, a Ford source with firsthand knowledge confirmed to the Detroit Free Press on Thursday.
"Our offer includes unprecedented improvements in wages," Kumar Galhotra, president of Ford Blue, said during a news conference Thursday afternoon. "This offer would put employees among the top 25% of all U.S. jobs, hourly and salaried. Provides great benefits. We provided product commitments for every UAW factory and provided job security commitments. It would change the lives of our employees for the better. All things considered, it's an incredibly positive offer."
He paused and added: "Now, as a company, if we go further, we risk the ability to invest in the business and profitably grow. Profitable growth is in the best interest of everyone associated with Ford. The UAW themselves publicly described our offers as the best offer on the table. And we bargained in good faith this week on joint venture battery plants. ... It does not make sense to do a deal that does not allow our business a chance to survive and grow."
Kumar Galhotra, president of Ford North America, in the cafeteria at Ford World Headquarters in Dearborn.
Ford discussed the strike on its highly profitable Kentucky Truck Plant, which closed at 6:30 p.m. Wednesday with a surprise UAW walkout involving 8,700 called by UAW President Shawn Fain and Vice President Chuck Browning and led by UAW Local 862 Todd Dunn. The factory generates $25 billion a year in revenue, Ford said.
Impact of strike on electric vehicle transition
While gasoline-powered and hybrid trucks continue to play a key role in Ford's financial portfolio, the automaker is working to preserve jobs while transitioning to electric vehicles, and it has committed to a record labor contract, Galhotra said, but the UAW has responded to its efforts by taking down the company's largest truck and SUV plant.
Ford was initially praised by Fain as the first of the Detroit Three to submit a proposal, on Aug. 29. Later, on Sept. 12, Ford CEO Jim Farley said negotiators improved on the initial proposal in an attempt to avert a strike.
"Both sides are looking for a deal. We don’t have one yet. We put in a huge offer today," Farley told the Free Press at the time. "It’ll be the most lucrative offer in the 80-year history of the UAW and Ford."
Fain showed mercy on Ford when he announced strikes Sept. 22 against General Motors and Stellantis, saying Ford was making good progress.
UAW President Shawn Fain called for an additional 7,000 workers to go on strike as of noon Friday, impacting workers at GM’s Delta Township Plant and Ford’s Chicago Assembly plant.
Executives at Ford, which is the largest employer of UAW members and builds all its full-size trucks in America, have said publicly and frequently that they believe in investing in American workers.
Revenue at the Kentucky Truck Plant, if it were a stand-alone business, would be greater than Nordstrom, Southwest Airlines or Marriott International. The plant builds F-Series Super Duty, Ford Expedition and Lincoln Navigator.
Impact of strike on electric vehicle transition
The plant closure is the third Ford plant targeted by the UAW after Michigan Assembly in Wayne and Chicago Assembly in Illinois. Gasoline-powered vehicles, like the Super Duty, are paying for technology investments in Ford e required to transition to electric vehicles. So shutting down truck production paralyzes everything.
"Normally, a vehicle rolls off the line at Kentucky Truck every 37 seconds," said Bryce Currie, Ford vice president of manufacturing and labor affairs. "It'll be a slow ramp-up before we can return back to that level."
He praised UAW leaders for the smooth shutdown of the plant so that it was done safely, noting key equipment was taken from a warm to cold state to protect assets. That's been the protocol for all plant shutdowns during this strike, Currie said.
Ford has offered all it has to give now, Galhotra said.
"We've been working with the union quite intensely for the last several weeks," he said. "This last week, the two areas we were talking about was pensions and the battery plants. Frankly, we thought we were making progress on both. We are quite surprised at the escalation."
Tapped out and looking for resolution
Ford, at this point, has reached its limit, he said. "We have actually stretched ourselves to get to this point. That wasn't done in a vacuum. That was done in multiple discussions with the union leadership, both the union international and Ford Department leadership. ... We're open to moving some money around within the deal that might fit the union's needs better. But broadly speaking, from the overall cost of the deal perspective, yes, we're there."
Again, Galhotra said, "We are at the limit. We stretched to get to this point. Going further will hurt our ability to invest in the business like we need to invest. ... We have to set a very clear limit beyond which it starts to hurt our business and starts to hurt our future. That's not good for anybody."
Ford is hoping to reach a deal and get to a tentative agreement as quickly as possible, he said. The strike has been ongoing for nearly a month.
The UAW has said it believes there's room for improvement and negotiations are continuing.