Tentative Ford, UAW Contract Moves Most Car Production Outside U.S.

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Ford and United Auto Workers (UAW) leaders have reached a tentative labor contract, which sees wage increases for workers and production of many models moving outside the U.S. Voting for the deal by the automaker’s 53,000 hourly workers begins this week. Although Ford agreed to invest $9 billion to upgrade or revamp or keep open its U.S.-based plants over the next four years, production of most cars could leave the U.S. by the end of their current generations. The investment will create or retain 8,500 jobs as well as bring production of unnamed vehicles to assembly plants in Chicago; Wayne, Mich.; and Avon Lake, Ohio. According to a summary of the deal, U.S. production of the C-Max, Focus, Fusion, and Taurus would end with the current generations. Focus and C-Max production will likely move to Mexico where the automaker also builds some Fusion models. Automotive News reports production of the Taurus could move to China, which is getting a next-gen model based on the Fusion’s platform. The automaker may discontinue the full-size sedan in the U.S. after its current production cycle. The upcoming Lincoln Continental will join the Ford Mustang at the company’s Flat Rock, Mich., plant next year. After Focus and C-Max production is relocated in 2018, a new model will be built at the Michigan Assembly Plant in Wayne with production of a second new model in 2020. Rumors suggest the Wayne plant will build a Ranger pickup and a Bronco SUV. Production of the Lincoln MKC crossover will cease at the Louisville assembly plant in order to build more Ford Escape models. There are no details on which plant will build the MKC. One interesting tidbit from the UAW contract agreement says the 6.2-liter V-8 built at the Romeo Engine plant will gain a “new displacement to support Super Duty.” Additionally, the Livonia, Sharonville, and Van Dyke transmission plants will all begin building new transmissions on their production lines. With the contract, the automaker agreed to remove a $12,000 cap on profit sharing if the automaker posts more than a $12 billion annual profit in North America. Ford’s current North American record was $8.8 billion in 2013. So far, the automaker has earned $6.6 billion in the first three quarters of 2015 or about $6,600 in profit sharing. Ford’s agreement with the UAW is similar to GM’s contract with the union. Ford workers would get a ratification bonus of $8,500 to GM worker’s $8,000 bonus. Source: UAW, Automotive News (Subscription required)