Ford has begun contract talks with the United Automobile Workers union amidst a heated political climate and falling vehicle sales.
UAW representatives, including President Gary Jones, met with Ford counterparts in Dearborn, Michigan yesterday to begin negotiations on new 4-year contracts. The negotiations are expected to be tough ones, with Jones heading into discussions with a hard line.
"With this year's negotiations, we will halt that race to the bottom," said Jones. "We will protect our work, our jobs and our way of life,"
Bill Ford, executive chairman of Ford’s board of directors, struck a more conciliatory tone and indicated his confidence that a deal could be reached. "[There are] a lot of tough issues; there always are," he said heading into negotiations.
Healthcare, job security, and temporary foreign workers are major issues for UAW. On the automotive side, expected falling vehicle sales for 2020 along with increased R&D costs for autonomous and electric cars are expected to put downward pressure on union talks as Detroit tries to secure profits in a tough automotive market.
UAW negotiations with GM and Fiat Chrysler are expected to begin today.
Labor costs are also an issue that will put a damper on negotiations. According to Reuters, the average labor cost per hour for an FCA worker is $55, while at GM it's $63. International carmakers have an average cost of $50 per hour, but those workers aren't represented by the UAW.
It should be noted, however, that the mere existence of the UAW is putting upward pressure on wages even for automotive workers who aren’t represented by the UAW. Fear of unionization can cause foreign carmakers to ensure high work standards and pay. Volkswagen's Tennessee plant only narrowly voted against joining the UAW last month, which is likely to be noted by VW executives.
However, UAW membership is down 8% this year amidst a federal corruption probe that has already indicted 7 former members for accepting bribes. Currently, the UAW represents just 140,000 American auto workers, which is a far cry from its 1.5 million membership back in the 1970s.