Ford Looking Outside UAW Strongholds After Strike

When UAW President Shawn Fain called Ford managers “the enemy,” and chose the automaker’s Louisville plant as the first truck plant to strike last year, he sent a message to Ford top management that relationships don’t matter.

Despite Ford being the No.1 UAW employer, and historically having the best relationship with the union, the automaker’s CEO, Jim Farley, says it is rethinking where it builds future manufacturing capacity.

As the company looks at the transition from internal-combustion to electric vehicles, Farley says, “We have to think carefully about our (manufacturing) footprint."

“Our reliance on the UAW turned out to be, we were the first truck plant to be shut down,” Farley tells the Wolfe Research Global Auto Conference. “Really, our relationship has changed. It's been a watershed moment for the company. Does this have a business impact? Yes.”

Ford has a $7 billion cost disadvantage against competitors who have less exposure to UAW labor, a difference Farley says the company had long accepted as part of its business.

But Farley’s comments at the conference raises questions about whether a new small battery-electric vehicle Ford is developing will be built in Mexico rather than in the U.S. with UAW labor. Vehicles built in North America are eligible for a $7,500 tax credit as long as other requirements are met.

An executive at Ford speaking on background tells WardsAuto Thursday that Ford Chairman] “Bill Ford was enormously ticked off when Fain referenced him as the enemy and chose Louisville to strike as if there was no past and no relationship built over time with Ford…he took it personally.”

Ford builds the Bronco Sport, Mach-E and Ford Maverick in Mexico today. Ford canceled plans to build a second plant in Mexico in 2017, instead investing in its Flat Rock, MI, plant. It also decided to build a battery plant for EVs in Michigan where it knew the union would be able to organize workers. The automaker also agreed to not combat organization of its massive Blue Oval City manufacturing campus under construction in Tennessee.