DEARBORN - A new entry-level wage structure negotiated as part of the 2007 UAW-Ford Collective Bargaining Agreement is enabling Ford to create additional jobs through in-sourcing an increasing amount oproduction work throughout its U.S. manufacturing plants.
The UAW and Ford agreed that 20 percent of Ford’s U.S. hourly work force could be comprised of entry-level employees, a benefit that will allow the company to achieve overall labor costs that are more competitive with U.S. manufacturing operations of foreign automakers like Toyota, Honda, Hyundai and Nissan.
In addition, all employees brought into Ford facilities at entry level will have the opportunity to move up to the higher legacy wage rates.
“It is a great opportunity to bring in new jobs and enable more people to share in the success of
the company,” said Bill Dirksen, executive director, U.S. Labor Affairs. “It also creates a system where all entry-level employees have a career path and the opportunity to grow their income over time.
“As we continue to grow the business and experience normal attrition, entry-level employees will be able to progress into the higher level wage. And they in turn will be replaced by newly hired entry-level employees.”
Employees will move in to the higher wage rate based on their seniority.
“If we reach the 20 percent entry-level limit and want to hire 1,000 new people in Kentucky, for example, we’ll look across the entire system to determine who the most senior entry-level people in the company are at the time, and those people will move up into legacy
wages, making room for new entrylevel hires,” Dirksen said.
In addition to creating new jobs, the entry-level wage structure gives Ford the opportunity to bring work and UAW-Ford jobs into its manufacturing plants that had previously been sourced to outside suppliers. Some of the jobs are moving in-house from suppliers based overseas, which not only benefits Ford employees but the economic growth of the U.S. as well.
Ford made a commitment during national bargaining in 2007 to in-source 1,559 jobs by 2011, and the company has plans to exceed that number by 35 percent. Most of the jobs involve building components – including parts, subassemblies and systems – in the company’s assembly, powertrain and stamping facilities around the country.
In addition to bringing UAW-Ford jobs back into Ford’s manufacturing facilities, in-sourcing offers other advantages.
“In-sourcing can help us offset certain currency risks associated with out-sourcing to other markets. It allows us to keep commodities needed in production closer to the plant, which minimizes inventory levels and lowers freight costs,” said Dirksen. “And it helps us to better control quality because parts manufacturing benefits from our robust quality processes and testing.”
At the end of the day, the decision of whether or not to in-source certain jobs boils down to dollars and “sense.”
“It depends on whether we have a business case,” said Dirksen.
“We have a tremendous work force, but it is an extremely competitive market, 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 in every measure.”