Ford CEO: UAW "holding the deal hostage" over EV battery plants
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The UAW expanded its strike against General Motors and Ford on Friday. Photo: Bill Pugliano/Getty Images
Ford CEO Jim Farley said Friday the automaker is "very close" to a record labor agreement with the UAW, but he believes the union is delaying the deal over reservations about electric vehicle battery plants.
Why it matters: The shift to electric vehicles, and the impact that could have on unionized auto workers, has long been a simmering issue in labor talks with U.S. automakers.
- As the two sides move closer to agreement on big wage and benefit hikes, job security in the EV era is now front and center.
Driving the news: In a call with reporters Friday, Farley said Ford's negotiations with the union are at a critical juncture.
- The UAW had demanded a 40% wage hike over four years; Ford had offered 20%.
- The two sides are now "really close on the economics," Farley said, adding "we are confident we would be able to make the investments we need to, including $50 billion in EVs."
- "We believe the UAW is holding the deal hostage over battery plants."
Catch up fast: Ford earlier this week paused construction of a $3.5 billion electric vehicle battery plant in Michigan, citing concerns about its ability to competitively operate the plant.
- The plant is one of four battery factories that Ford plans to build in the U.S. to supply future EVs.
- UAW President Shawn Fain slammed the decision earlier this week, saying it was "a shameful, barely-veiled threat by Ford to cut jobs."
- The UAW wants automakers to pay workers at battery plants the same higher wages as workers that build engines and transmissions.
- Ford says workers haven't even been hired yet for the battery plants, which are still under construction, so they haven't even decided whether to join the union, much less negotiate a contract.
Between the lines: Three of the battery plants Ford is building in Tennessee and Kentucky are joint ventures with a Korean partner, but the Michigan plant has been the subject of intense scrutiny because of Ford's plan to use technology licensed from a Chinese company.
- Republicans in Congress are investigating the deal because of worries that it could facilitate the flow of U.S. tax subsidies to China.
- Farley said the company paused work on the battery plant in order to assess labor costs and how new rules around future EV tax credits will be implemented.
- Ford also wants to see "whether we can secure a deal that allows us to invest in the products those batteries are going to go into."
What they're saying: "What is at stake here is the future of the domestic auto industry, future of industrial Midwest, and future of good paying manufacturing jobs."
Where it stands: It's been two weeks since the UAW launched its unprecedented strike against GM, Ford and Stellantis.
- On Friday, the union expanded the strike to include two additional factories: a GM plant in Lansing, Michigan, and a Ford plant in Chicago, affecting 7,000 workers.
- There are now five assembly plants and 38 parts distribution centers on strike across the country.
- The additional walkouts Fain announced Friday mean that 25,000 workers, or 17% of UAW members at the Big Three, are currently on strike.
