Ford will take $600M hit in 4th quarter in wake of UAW deal
A large part of the $600 million will come from the $8,500-signing bonus in the contract, and the company will backdate pay to Sept. 15, according to The Detroit Free Press. Other parts of the deal also end the two-tier wage structure over the coming years, and veteran employees get their first raise in about a decade.
Ford benefits under the UAW contract because it sees fairly small cost increases and gets more freedom in dealing with the union. Labor costs with benefits increase slightly to $60 an hour in 2019 versus $57 currently, and the automaker no longer has a cap on the number of temporary workers that it employs. The company can also now mandate weekend overtime when there's demand.
Expect Ford to use the contract to shift production of many vehicles outside of the US. For example, the Focus and C-Max might go to Mexico after 2018, and the Fusion and Taurus could move abroad, too. "We need to also have some flexibility to move some of our smaller products to other locations, which we intend to do," Ford president of the Americas Joe Hinrichs said, according to the Free Press. In place of these vehicles, rumors suggest a possible US revival for the Bronco and Ranger.
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