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DETROIT – Ford Motor is “at the limit” of what it can offer the United Auto Workers union in terms of economic concessions, an executive said Thursday as contract negotiations continue for roughly 57,000 U.S. workers.
Kumar Galhotra, president of the company’s traditional operations, said that while the company is willing to shuffle money around within the existing offer to meet the union’s priorities, any added costs would hurt the automaker’s ability to operate in the future and invest in emerging areas such as 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.
His comments come a day after the union unexpectedly launched a strike at the automaker’s highly profitable SUV and pickup truck 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 Wednesday night that the strike escalation was a result of the company repeating its previous offer instead of offering additional economic benefits.
“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.
In the past several days, Ford said, it had been negotiating outstanding issues such as retiree benefits and potential options for future battery plant workers, in line with guidance from the union.
Electric vehicle battery plants have been a major point of contention for the union in bargaining with all three of the Detroit automakers. Ford, General Motors and Stellantis have all formed joint ventures with battery makers to manufacture EV batteries in the United States. Officially, because they’re owned by joint ventures, the battery plants aren’t and won’t be covered by the automakers’ agreements with the union.
The union has characterized the joint-venture arrangements as a plan to shut it out of the new factories, many of which are under construction now. But the UAW said last Friday that GM had agreed to place the workers at those battery plants under its national agreement with the union – a strong hint that it now expects Ford and Stellantis to do the same.