Tags: Ford | labor | costs

New Contract Could Drop Ford's Labor Costs

Friday, 21 Oct 2011 09:25 AM

By Sandy Fitzgerald

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Ford could see its labor costs drop through its new contract with the United Auto Workers, a company official said Thursday. The new contract will allow bonuses and profit sharing for workers, but freezes wages.
 
“Compensation increases of less than 1 percent annually are expected to be more than offset by the benefits resulting from the work practice changes and increased usage of entry-level employees,” said Ford President of the Americas Mark Fields, according to the Cleveland Plain Dealer.
 
Fields said Ford expects to hire more workers at $19.28 per hour, compared to senior workers’ wages of closer to $30 an hour. Ford wants to have about 8 percent of its workforce earning the lower wage by 2015. Only a few workers are earning the low wage at this time.
 
Some workers were not happy about the wage freezes, but the union approved the contract because of the potential for some 12,000 new jobs over the next four years.
 
More jobs could come in 2014 Ford converts its Ohio assembly plant to make commercial trucks, bringing jobs back from Mexico.
 
Other jobs will be lost, though, when Ford stops making its Econoline vans, putting 400 workers at a Ohio stamping plant out of business.

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