A Ford Motors executive said on Thursday, they are “at the limit” of what they can offer to the United Auto Workers union in terms of economic concessions.
Kumar Galhotra, president of the company’s traditional operations, said that while Ford is willing to make changes to their spending to make room for the union’s demanded changes, any additional costs would hurt the companies ability to operate in the future, on top of the ongoing investments in electric vehicles.
“We’ve been very clear that we are at the limit. We stretched to get to this point,” Galhotra said Thursday during a media and analyst call. “Going further will hurt our ability to invest in the business like we need to invest.”
Galhotra declined to disclose how much the company’s current offer to the union would cost the company.
This comment comes just a day after UAW launches an unexpected strike against the company’s high profitability SUV manufacturing plant in Kentucky.
“We’re surprised by the escalation last night,” Galhotra said. “Kentucky Truck Plant is one of the most important manufacturing plants of any kind in America.”
UAW President Shawn Fain said the strike escalation was a result of the company repeating its previous offer instead of offering a new one.
“This offer was the exact same offer they gave us two weeks ago. In our position, they’re not taking it seriously,” Fain said during a pre-recorded online video. “We’ve been very patient working with a company on this. At the end of the day, they have not met expectations. They’re not even coming to the table on it.”
Ford’s most recent proposal included 23%-26% wage increases depending on classification, retention of platinum health care benefits, ratification bonuses, reinstatement of cost-of-living, and other benefits.
Electric vehicle battery plants have become a major point of contention in the ongoing negotiations between UAW and the three Detroit automakers: Ford, General Motors (GM), and Stellantis.
Each automaker has formed joint ventures with battery makers to manufacture EV batteries in the United States.
However, because these plants are owned by joint ventures, they are not covered by the automakers’ agreements with the union.
UAW has characterized these joint-venture arrangements as a plan to exclude the union from the new factories, many of which are currently under construction.
The union has been pushing for the workers at these battery plants to be included in the automakers’ national agreements, ensuring that they will be unionized.
GM made a breakthrough concession last week by agreeing to place the workers at its battery plants under its national agreement with the UAW.
This move was seen as a victory for the union, as it demonstrated that EV battery manufacturing could be unionized.
However, Ford and Stellantis have not yet agreed to include their battery plant workers in the national agreements.
The Detroit automakers have announced investments of approximately $22 billion in eight U.S. battery plants, highlighting the importance of these facilities for the future of the automotive industry and President Joe Biden’s push for domestic manufacturing.
