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Last year many industries in the United States encountered many disgruntled union workers who fought for better pay and working conditions. Consequently, the monumental strikes have altered the relationships between workers and their employers. Most notably, the United Auto Workers (UAW) strike has led top executives at Ford Motors to “think carefully” about where it will continue to build its future vehicles (Krisher, 2024). According to CEO Jim Farley, Ford has always maintained a good relationship with its worker unions and has avoided strikes for over 50 years. However, Ford’s most profitable factory was the first plant to go on strike and shut down by the union workers. 

With Ford transitioning to more electric vehicle production in the future, now is the chance for the company to seriously consider where future production should take place. Farley was proud of the fact that Ford has continuously chosen to build most of its trucks in the U.S., despite the costs being higher compared to its competitors. The CEO admitted that the UAW strike has caused a rift in the relationship and will have impacts on Ford’s business decisions moving forward. On the other hand, Union President, Shawn Fain, has criticized Ford for wanting to lower wages instead of bettering the auto industry. Fain went as far as saying, “‘Maybe Ford doesn’t need to move factories to find the cheapest labor on Earth…  Maybe it needs to recommit to American workers and find a CEO who’s interested in the future of this country’s auto industry’” (Krisher, 2024).

President Biden released a statement to reassure auto workers that his administration is working hard to ensure that U.S. businesses keep their production in the U.S. Additionally, Biden also believes that union workers have the collective right to bargain for better wages and benefits. The UAW made large gains with top workers winning 33% raises, and raising the wage to $42 an hour for top positions. However, this could cause Ford to fall behind, with the company already having a $7 billion annual cost disadvantage compared to its competitors. To combat this, Ford plans to make cultural and structural changes to cut costs.

Ford has also suggested that it will shift its electric vehicle strategy to focusing on smaller, lower priced EVs in order to save on costs. As of now, there is already a team at Ford who is developing a smaller and more cost-effective vehicle that would still be profitable due to the U.S. federal tax credits. Ford did not state a timeline on this new development, however it did state that its next generation of EVs will come out between 2025 through 2027.

Source: https://apnews.com/article/ford-auto-workers-contract-ceo-rethink-factory-locations-ed580b465d99219eb02ffe24bee3d2f7