Ford Labor Pact With UAW Begins to Unfold

Ford is well on its way to fulfilling terms of its labor contract with the United Auto Workers union signed in October with new investments and additional employees.

Under the agreement, the auto maker will pump $16 billion into its U.S. operations by 2015, including $6.2 billion for plant upgrades. It also will add 12,000 hourly jobs to its U.S. workforce in that timeframe.

Ford’s most recent news is a $200 million investment in its Louisville, KY, plant that is gearing up to build the all-new ’13 Ford Escape cross/utility vehicle. The auto maker says 1,300 workers will be added to produce the CUV.

Other steps Ford is taking include moving medium-duty commercial trucks from Mexico to its Avon Lake, OH, production facility, where it invest $128 million.

Bringing jobs back to the U.S. from Mexico, China and Japan is a key part of the labor deal; and Avon Lake is expected to gain 1,900 new workers for vehicles to be built at the plant once the E-Series van is discontinued sometime after 2013.

The Ford F-650 and F-750 medium-duty trucks, previously assembled in Escobedo, Mexico, will replace the van’s volume, and the F53 motor-home chassis and commercial-stripped chassis production also will be added at the plant.

Ford says the production shift will make the auto maker the only U.S. full-line manufacturer of Class 6 and 7 trucks. It also will mark the end of a decade-old Blue Diamond Truck joint-venture between Ford and Navistar.

In a related move, Ford plans to spend $1.1 billion on its Kansas City, MO, plant to build the fullsize Transit commercial van, which is replacing the E-Series.

Another investment is under way at Ford’s AutoAlliance International factory in Flat Rock, MI, which is a JV with Mazda. Ford has not formally announced the amount it will spend, but WardsAuto is told the plant is being retooled to accommodate an unspecified overflow production of the Fusion sedan from its Hermosillo, Mexico, facility.

Ford announced the Fusion would be added to AAI shortly after Mazda said this summer it was ending production of the Mazda6 at the plant and shifting it to Mexico. AAI also builds the Ford Mustang.

John Jraiche, Fusion chief program manager, says Fusion volume at Flat Rock will be based on demand and, if it is not sufficient, other models could be added.

“It will be a fully flexible manufacturing facility capable of building a number of nameplates,” he tells WardsAuto. “We will be able to introduce up to three nameplates at any one time.”

Ford says 1,200 new jobs will be added to AAI to accommodate the Fusion.

Other jobs and investments are planned as the auto maker rolls out its vehicle-electrification strategy. For instance, $135 million will be spent to develop a new hybrid-electric transmission at Ford’s Van Dyke, MI, transmission plant and lithium-ion battery packs at its Rawsonville, MI, components facility.

Van Dyke is expected to add about 200 new jobs by next year, while Rawsonville will get an additional 40 new positions. The auto maker says it hopes to produce 100,000 electrified vehicles annually beginning in 2012.

The new jobs at Van Dyke will be in-sourced from Japan, where the hybrid transmissions previously were provided by Japanese supplier Aisin.

Ford already has invested $300 million in its Wayne, MI, assembly plant, which currently builds the Focus C-car with both gasoline and electric powertrains. Next year, the factory will add the C-Max hybrid CUV and C-Max Energi plug-in hybrid.

Adding the two models means more job openings, says John Fleming, executive vice president-global manufacturing and labor affairs.

“In the second half of 2012, we’re going to put a third shift here,” he tells WardsAuto during a tour of the Wayne facility. “Expectations are we will add 1,200 new people.”

Ford’s Chicago facility will benefit from the UAW contract with 1,200 new positions to accommodate increased demand for the Ford Explorer SUV and new Police Interceptors. A $200 million investment was announced last month for expansion of the sites assembly operations and a nearby stamping plant.

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