Ford's Farley claims UAW is 'holding the deal hostage over battery plants'

Ford Motor Co. CEO Jim Farley on Friday accused the United Auto Workers of "holding the deal hostage" over the automaker's four planned battery plants in the United States.

Farley's remarks about ongoing contract negotiations with the UAW came on the heels of the union expanding its strike to two more plants: Ford's Chicago Assembly Plant, which builds the Explorer, a police utility vehicle, and the Lincoln Aviator; and General Motors Co.'s Lansing Delta Township Assembly plant, which builds the Buick Enclave and Chevrolet Traverse. In all, about 25,300 autoworkers out of some 146,000 Detroit Three workers represented by the UAW now are on strike across the country as the historic work stoppage entered its 15th day.

“Here’s the bottom line from Ford’s perspective," Farley said during a news briefing Friday. "First, Ford has offered an incredible contract that would change the lives of over 57,000 workers for the better. Second, we believe the UAW is holding up the deal over battery plants that won’t come online for another two to three years. And finally, we still have time to reach an agreement and avert a real disaster — but not much more time, given the fragility of the supply base.”

Ford officials noted that the company has offered a number of contract improvements, including wage increases of more than 20% over the length of the contract, cost-of-living allowances, health care coverage that they say would put workers in the top 1% of all Americans, improved retirement contributions, more time off, layoff protections for permanent employees, and product commitments for all UAW-represented plants in the United States, among other items. They said the company has "continued to negotiate and improve its offer" since Sept. 12, when Ford presented a proposal offer ahead of the strike.

“The deal we offered would put our UAW workers among the best-paid hourly manufacturing jobs in the world, and in the top 30% of all full-time workers in America, of any industry, hourly and salaried," Farley said. “Record contract? No problem. Mortgaging our future? That’s a big problem; we will never do it.”

Ford claims that acquiescing to all of the union's demands — which include bringing back defined benefit pension plans for all workers, higher wage increases than what Ford has detailed, and additional job security provisions — would add billions more in costs that would make the company uncompetitive and perhaps even unprofitable.

“A bad deal would threaten, now, midsize and more expensive, larger vehicles like Escape and Explorer," Farley said. "We’d have to choose to cut future investments in those products, restructure and reduce our headcount throughout the company, including UAW workers. What’s really frustrating is that I believe we could reach the compromise on pay and benefits, but so far the UAW is holding the deal hostage over battery plants."

Battery plant talks

At issue, according to Ford executives, are negotiations over four battery plants Ford is building in the United States. Three are part of a joint venture with South Korean battery manufacturer SK On. One of those plants is being built in Tennessee alongside a Ford-owned EV assembly plant; the other two are being built in Kentucky. The fourth plant, located in Marshall, would be a wholly-owned Ford subsidiary that would assemble lithium iron phosphate batteries using technology licensed from Chinese battery maker Contemporary Amperex Technology Co. Limited, or CATL.

"Keep in mind, these battery plants don’t exist yet. They’re mostly joint ventures. And they have not been organized by the UAW yet because the workers haven’t been hired, and won’t be for many years to come," Farley said. "They won’t scale until the next contract.”

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