DEARBORN – By 2012, Ford will have brought more than 2,100 hourly jobs back into its U.S. manufacturing plants that were previously being performed by suppliers inside and outside of the U.S.
To put that figure in perspective, it is equal to or more than the total number of workers Ford employs in several different manufacturing facilities.
“We’re working together with the United Auto Workers (UAW) to identify long-term business cases, and we’re bringing jobs back into the plants,” said Marty Mulloy, vice president, Labor Affairs. “This is a good thing.”
It’s a very good thing.
Ford has already well exceeded – by 35 percent – the original commitment made in the 2007 UAW-Ford Collective Bargaining Agreement to in-source 1,559 jobs by 2011. Most of the jobs involve building components – including parts, subassemblies and systems – in the company’s assembly,powertrain and stamping facilities around the country.
For example, Van Dyke Transmission Plant will be building electric drive transaxles for Ford’s future hybrid vehicles, including the next-generation Fusion Hybrid – work previously done by a supplier in Japan.
Mark Willis, plant manager, Van Dyke Transmission Plant, says the Van Dyke team is very excited to be given the opportunity to deliver new technology through the in-sourcing initiative.
“We’re very proud that from a competitive standpoint we can prove that in-sourcing this work is a good business decision,” he said. “It’s new technology. It’s new investment into the facility. We’re supporting the company’s electrified vehicle plans. And the bottom line is that it provides more jobs.”
And jobs were brought in to the Chicago Stamping Plant that had been done previously by outside vendors – manufacturing stampings for the new Ford Explorer.
“I think it’s good for all Ford Motor Company employees – hourly and salaried. Anytime we can bring more work in, that’s job security for all of our people,” said Gloria Georger, plant manager, Chicago Stamping Plant. “And it’s a vote of confidence that we stamp well. We’re really proud to be a part of the quality of the new Explorer.”
Mulloy says Ford’s ability to bring jobs in-house is the result of working handin-hand with the UAW to make the plants more competitive, which includes the entry-level wage rates negotiated as part of the 2007 national bargaining. The UAW and Ford agreed that up to 20 percent of the U.S. hourly workforce could be comprised of entrylevel employees.
“We’ve got a real opportunity for growth in part because we’re going to have the ability to hire in the future at the entry-level wage rate, which will make a lot of different business opportunities within Ford and the U.S. more attractive than they would have been in the past,” he said.
According to Mulloy, entry-level employees – who will be hired only once existing employees are all actively working in Ford’s plants – will eventually have the opportunity to grow into legacy wage rates.
“As we continue to grow the business and experience normal attrition, entry-level employees will be able to progress into a higher- level wage,” he explained. “And they in turn will be replaced by newly hired entry-level employees.”
Another factor supporting job in-sourcing is the rising price of fuel.
“If oil prices continue to go up, freight costs go up, which means that bull’seye sourcing – keeping commodities closer to the plant – will be good for both Ford and the UAW,” said Mulloy.
In addition to eliminating transportation costs, bulls-eye sourcing also helps ensure better quality control.
“We can get a handle on the commodities and manage quality more effectively if they’re closer to home rather than being shipped in,” said Mulloy, emphasizing that maintaining top quality is paramount. “If we’re having a quality problem with a component that is coming in from a supplier, it would weigh very heavily into the decision to bring that work back to Ford.”
Another benefit to in-sourcing is what Mulloy refers to as “just in time.”
“We want our commodities to be available just in time to minimize inventory levels,” he said. Probably the biggest factor hindering the company’s ability to bring jobs in-house, says Mulloy, is the amount of money necessary to fund the investment.
“That’s a huge hurdle because if it involves a big cash expenditure and the supplier already has the capital equipment committed, it’s often hard to overcome that,” he said. At the end of the day, according to Mulloy, it all boils down to dollars and “sense.”
“The decision to in-source depends on whether we’ve got a business case. We’ve got a lot of hard workers,” he said. “But it is a competitive market out there, and in the end the customer is not going to pay a nickel more for their car because we’re doing the work inside. We have to be able to beat the competition.”