Mexican Media Brands
Ford Books $600 Million for Labor Contract Bonuses
Ford Motor Co. says it will book a $600 million expense this year to pay for $10,000 worker bonuses under the company’s new four-year labor contract with the United Auto Workers union.
#economics #labor #workforcedevelopment
Share
Ford Motor Co. says it will book a $600 million expense this year to pay for $10,000 worker bonuses under the company’s new four-year labor contract with the United Auto Workers union.
The new agreement will increase Ford’s U.S. hourly labor costs by about 1.5% per year, to $60 from $57, according to Chief Financial Officer Bob Shanks. He tells analysts the cost is $8-$10 per hour more than is paid by foreign carmakers which operate non-union plants in the country.
But the deal brings Ford’s labor costs into alignment with those of General Motors and narrows the gap with Fiat Chrysler Automobiles. It also gives Ford more flexibility about where it produces vehicles. And it enables the company to hire more temporary help and an unlimited number of entry-level workers, both of which are paid less than veteran workers receive.
Analysts say the new deal will raise Ford’s labor costs per vehicle by about $200 to $2,600 by 2019 when the new contract expires.
RELATED CONTENT
-
Targets of U.S. Aluminum and Steel Tariffs Declare Counter-Measures
As expected, the European Union, Canada and Mexico have announced a broad array of counter-tariffs in response to U.S. import taxes of 10% on foreign aluminum and 25% on foreign steel that went into effect at midnight.
-
GM, PSA Execs Rush to Build Support for Opel Sale
Top executives from General Motors Co. and PSA Group are scrambling to build support among alarmed European government and labor leaders for a plan to integrate GM’s Opel unit with PSA.
-
Skilled-Trade Workers Reject GM Contract, Ratification in Limbo
The United Auto Workers union says its production workers ratified a new four-year labor contract with General Motors Co. by a 58% margin.