The United Auto Workers union has kicked off contract talks with Ford.
Ford is looking to no longer be saddled with the highest labor costs in the automotive industry. The UAW, which made deep concessions during the darkest days of the Great Recession, hopes to end a two-tier pay system in which younger workers are paid less than more veteran employees doing the same job.
The current four-year contract, which expires on Sept. 14, included no general wage increase but allowed for bonuses such as a ratification lump sum, an inflation protection bonus, and a competitiveness bonus. Companies often prefer the flexibility of bonuses, which aren’t locked in as long-term operating costs the way raises are.
“During the dark days of ’07, ’08, ’09, we pulled together back from the brink of extinction,” Executive Chairman Bill Ford recently said at Cass Tech High School in Detroit for the official kickoff of labor negotiations. “I for one will never forget the sacrifices and also the incredible dedication that took place during that time. We all did pull together to save our company at that time.”
Unlike the last time the two parties came to the bargaining table, the automotive industry is booming. Since the 2011 contract, Ford has added 15,00 jobs and invested $6.2 billion in the United States, where it operates 19 factories, according to the automaker. Ford posted a North American profit of $6.9 billion in 2014. It expects to make between $8.5 billion and $9.5 billion this year, after a historic net income of $1.9 billion in the second quarter.
