Ford: Labor costs to rise about 1.5% a year after deal

“The agreement aligns our labor cost structure more closely with our competition and improves our manufacturing productivity and staffing flexibility”, Chief Executive Officer Mark Fields said in a statement Monday. Fields said contract votes are nearly always close, so he wasn’t anxious about the narrow margin. Company vice president of labor affairs Bill Dirksen said he could not give an exact number of temporary workers the company plans to use, but said that it will make Ford more flexible with being able to cover vacation time in the summer and with boosting its worker count for product launches.

But the pendulum swung the other way in Dearborn, where Local 600 has more than 8,000 members.

The new agreement also puts Ford on common footing with its domestic competitors regarding overall labor cost structure.

Kristin Dziczek, director of the industry and labor group at the Center for Automotive Research, has calculated that labor costs per vehicle at Ford will rise about $200 per vehicle to $2,401 and hourly costs will increase from $57 to $60.

But the company said Monday that the deal with the United Auto Workers limits labor cost increases to 1.5 percent per year and is consistent with its full-year financial guidance. The dollar cost will match GM’s, which climbs 9 percent from $55, and will top Fiat Chrysler’s, which will rise 19 percent to $56 from $47, according to their analysis. “They proved more hard to sell than one would have thought looking at all that the UAW achieved”. The company exceeded that commitment by adding more than 15,000 hourly jobs between 2011 and 2015 and investing $10.2 billion in the company’s US plants. All three companies now have a path that brings new workers to a similar base wage within eight years.

Maintaining the current Supplemental Unemployment Benefit agreement, which allows Ford to remain competitive in a downturn. Skilled- trades workers’ total compensation will grow an average of $35,098 over four years, the UAW said. Workers will get $8,500 in signing bonuses plus $1,500 in early profit sharing.