Ford’s CEO just gave the UAW some bad news that no one saw coming

Feb 27, 2024

The United Auto Workers (UAW) strike against the Big Three auto makers continues to reverberate throughout the industry.

Any gains the UAW might have achieved through the strike looks like they will be short-lived.

And Ford’s CEO just gave the UAW some bad news that no one saw coming.

The huge 2023 strike that the United Auto Workers (UAW) organized against Detroit’s Big Three cost carmakers billions of dollars. 

Snatching defeat from the jaws of victory

While the agreements eventually signed were seen by most observers as a win for the UAW, it now looks like that win will be fleeting.

Ford warned union bosses at the time that the strike would have long-term ramifications for the union.

And in a recent speech at the Wolfe Research Global Auto Conference, Ford boss Jim Farley said that his team will “think carefully” about where to build future vehicles.

This was seen as a clear hint that some future Ford vehicles may not be manufactured in factories where workers are represented by the UAW. 

According to the Associated Press, he even gave a clear example of this.

Ford builds pickup trucks, including the highly popular and profitable F-150, in the United States rather than in Mexico like some of its competitors. 

But thanks to union boss demands, labor costs are now much higher in the United States, and each truck is more expensive to build. 

Farley explained how Ford previously made this choice because it believed that the higher cost was the “right kind of cost.”

A new, less amicable relationship 

However, the 2023 strike put this cost and the once-amicable relationship with union bosses in a whole different light. 

“Our reliance on the UAW turned out to be that we were the first truck plant to be shut down. Really, our relationship has changed. It’s been a watershed moment for the company. Does this have a business impact? Yes,” he said.

UAW boss Shawn Fain immediately responded to Farley’s comments. 

“Maybe Ford doesn’t need to move factories to find the cheapest labor on Earth. Maybe it needs to recommit to American workers and find a CEO who’s interested in the future of this country’s auto industry.”

While Farley didn’t reveal exactly how the strike will affect the process of choosing what to build in which plant, the AP thinks a recently announced small electric model may be affected by the decision. 

Ford’s business plan seems to hinge on the electric car’s ability to qualify for federal tax credits of up to $7,500. 

Ford could decide to build the EV in Mexico, which would save money, protect the company from strikes, and still allow the vehicle’s buyers to qualify for the tax breaks. 

Since the model is likely to make its debut in the next couple of years, Ford would need to decide where to build it soon.

The 2023 strike sent shockwaves throughout the entire automotive industry. 

Once UAW union bosses signed agreements with Ford, Stellantis, and General Motors, it turned its attention to the companies that operate non-union plants in the United States. 

It launched a drive to organize Tesla, which shut down the effort by giving employees a raise in a bid to avoid unionization. 

The UAW is also trying to organize the Volkswagen plant in Chattanooga, Tennessee, as well as the Mercedes-Benz plant in Alabama.

Union bosses are also claiming that 30% of workers in Hyundai’s Alabama factory have said they want to join the union.

Union bosses seem hell-bent on destroying every automaker in the United States.

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