Ford Plans 6,000 New Union Jobs in Three Midwestern States

Ford Motor said Thursday it plans to invest $3.7 billion in facilities across the Midwest, mostly for electric vehicle production, which the company says will create more than 6,000 union jobs in the region.

“We are investing in the work of America and our employees to build a new generation of incredible Ford vehicles,” Jim Farley, the company’s president and chief executive, said in a statement. “Transforming our company for the next era of American manufacturing requires a new way of working.”

The announcement, made in conjunction with the United Automobile Workers union, details investments in the three states. Ford said it would invest $2 billion and create about 3,200 union jobs in Michigan, including many related to production of the new F-150 Lightning pickup truck, the company’s highest-profile and most important bet on electric vehicles.

In Ohio, Ford will spend more than $1.5 billion and create nearly 2,000 union jobs, primarily building electric commercial vehicles by the middle of this decade. The company also said it would add more than 1,000 union jobs at an assembly plant in Kansas City, Mo., which will produce commercial vans, some gas-powered and some electric.

The company has indicated that some investments are coming, such as expanding production capacity for the F-150 in Michigan, but has not specified the magnitude.

The move follows Ford’s announcement last year that it would build four plants in Kentucky and Tennessee — three battery factories for electric vehicles and a truck assembly plant — which irked union officials and elected leaders in Midwestern states, who fear losing manufacturing jobs. in the South.

In addition to the new Midwestern job, Ford said it would convert nearly 3,000 temporary jobs into permanent full-time positions before the date required by its UAW contract—that is, after two years.

We have always advocated for employers and legislators that union work is worth the investment,” UAW president Ray Curry said in a statement. “Ford stepped forward by adding this job and converting 3,000 UAW members to full-time permanent status with benefits.”

Sam Abuelsamid, an auto industry analyst at Guidehouse Insights, said the changes were important as a way to help Ford attract and retain workers in a tight job market, while potentially helping the company avoid costly labor unrest during contract negotiations that expire next year. for spending billions on the transition to electric vehicles. A six-week strike by workers at General Motors in 2019 cost the company billions of dollars.

“I believe the one thing Ford really wants to avoid is a potential strike,” said Abuelsamid. “Keeping a positive relationship with the UAW now is to their advantage.”

But the investment is unlikely to substantially reduce the broader threat the shift towards electric vehicles poses to auto unions and jobs in the US vehicle manufacturing industry, which stands at about one million.

“It’s about changing the perception of what’s going on,” Abuelsamid said. “It’s a balancing act between your workforce and your investors,” who prefer to see labor costs rise more slowly or fall at unionized automakers like Ford and General Motors.

Because electric vehicles incorporate far fewer moving parts than gasoline-powered vehicles, they require significantly less labor — about 30 percent less, according to figures Ford produces.

As a result, estimates suggest that the electrification burden on auto industry jobs could be significant without large new government subsidies. A report released in September by the Institute for Liberal Economic Policy, which has links to an organized workforce, found that the auto industry could lose about 75,000 jobs by 2030 without substantial government investment.

In contrast, the report found, if additional government subsidies encourage domestic component manufacture and a greater market share for vehicles assembled in the United States, the industry could add about 150,000 jobs over the same period.

President Biden has backed substantial subsidies for electric vehicles, including vehicles made by unionized employees, but those moves have languished in the Senate and the outlook is uncertain.

Meanwhile, most of the job growth related to electric vehicles has occurred in non-union facilities owned by emerging automakers such as Tesla, Rivian and Lucid, or US-based battery facilities owned wholly or partly by foreign companies such as South Korean manufacturers. SK Innovation and LG Chem.

In Thursday’s announcement, Ford noted that new battery and vehicle production facilities in the South would create about 11,000 jobs. But these employees do not automatically become union members, and workers in the state tend to face an uphill battle with unionization.

For investors, however, Ford’s additional investment in electric vehicles seems welcome news as the company seeks to reinvent itself amid competition from the likes of Tesla and Rivian. Ford’s share price, which has fallen substantially this year, was up more than 2 percent on Thursday.

Ford also said Thursday that it sold 6,254 electric vehicles in May, a more than 200 percent jump from a year earlier. That number includes 201 F-150 Lightnings, which the company began producing in April.

The company has around 200,000 orders for Lightning, which is central to its efforts to catch up to Tesla, and has stopped accepting new ones because production will take months to keep up with demand.

Ford indicated that truck sales will be much higher in the coming months as production picks up and trucks are on their way to dealerships. Ford targets to produce 150,000 Lightning trucks per year by the end of 2023.

Sales of electric vehicles – and conventional cars – have been limited by a shortage of computer chips. Ford’s overall new vehicle sales in May fell 4.5 percent from a year earlier. Auto executives are also increasingly concerned that the supply of lithium, nickel and other raw materials needed to make the batteries that power electric cars cannot meet the growing demand for such vehicles.

Vika Bajaj contribution reporting.

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