The cost of domestic production? Ford’s production costs in the US are $1 billion higher than its competitors

Ford's US production costs are $1 billion higher than its competitors' domestic production costs

【Phoneauto News】Today, according to foreign media reports, American automaker Ford is negotiating with the United Auto Workers (UAW) union. Although it produces more cars in the United States compared to its competitors General Motors and Stellantis, it is reported that Ford has paid a considerable price for this.

Ford Motor Company

Data shows that approximately 80% of Ford vehicles are produced in the United States, making it one of the most localized automobile brands in the country. However, insiders within the company have revealed that Ford’s approach has cost them nearly $1 billion more in costs compared to General Motors and Stellantis.

Ford Motor plant

The report states that Ford’s labor costs per hour are $9 higher compared to foreign automakers that employ non-union workers. The company pays an average salary and benefits of $112,000 per year to its employees, and it is expected that this number will increase after negotiations with the United Auto Workers union. In fact, Shawn Fain, the president of the United Auto Workers, stated that in response to Ford, General Motors, and Stellantis’ record profits in recent years, he will push for significant salary increases and additional benefits for members.

The United Auto Workers union also hopes to reinstate the practice of adjusting wages based on the cost of living and abolish the tiered wage system that limits workers’ wages to around $32 per hour. In some aspects, Ford has already surpassed the requirements set in the latest labor agreement it signed in 2019. Since 2019, it has created or retained 14,000 United Auto Workers union jobs, exceeding the promised job increase by approximately 5,600. Furthermore, it has invested an additional $1.4 billion more than initially planned and has converted nearly 14,100 temporary workers into permanent employees in the past four years.

Ford Motor Factory

However, pleasing the United Auto Workers Union is not an easy task for Ford. Last month, Sean Fein criticized a plan by the U.S. Department of Energy to provide a $9.2 billion loan to a joint venture between Ford and battery manufacturer SK, to establish three large-scale electric vehicle battery factories in the United States. Fein stated that this loan did not consider wages, working conditions, or the rights of union workers.

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