By Keith Naughton, Bloomberg News report
DETROIT (May 2, 2014) — Boosted by record profits in North America, Ford Motor Co. is likely to hire more than the 12,000 new workers that it promised in its 2011 contract with the United Autoworkers (UAW) union, according to the company's top American executive.
“The business has grown faster than we predicted it would in 2011,” Joseph R Hinrichs, Ford's president of the Americas, said in an interview April 30. The company's hiring “is definitely ahead of schedule and there's a high probability we'll overshoot” the 12,000 hourly jobs it committed to create in the 2011 contract.”
The U.S. auto maker said April 30 that it hired 2,000 new workers at its Claycomo, Mo., factory, where it is investing $1.1 billion to add production of the Transit cargo van to the F-series trucks the plant also builds. Ford said it now has completed about 75 percent of its commitment to hire 12,000 workers by 2015.
The company has said it employed 84,000 workers in North America at year-end 2013 — up from 75,000 at year-end 2011, when it reached a four-year agreement with the UAW.
The hiring helps lower Ford's labor costs since new hires are paid slightly more than half the $27 an hour veteran workers make. More than one-in-five Ford U.S. hourly workers now make the lower wage, Mr. Hinrichs said, including 26 percent of the workers in Claycomo.
“The 2,000 new jobs and hiring we've done here has certainly increased the entry level percentage here, which lowers the blended costs of labor and overhead,” Mr. Hinrichs said by phone from the Claycomo plant. Lower wages paid to new workers “has been an important part of the more competitive cost structure in North America.”
Ford had a record pretax profit of $8.8 billion in North America last year on surging sales of F-series pickups, Escape SUVs and Fusion family sedans. In the first quarter, Ford's North American pretax profit fell to $1.5 billion, from $2.4 billion last year, as the automaker spends heavily to retool two F-series factories to prepare to produce a new aluminum-bodied version of the truck.
The company is rolling out a record 23 new models worldwide this year, including a redesigned version of its 50-year-old Mustang sports car. The hiring buildup is connected to the product line overhaul, said Eric Lyman, vice president at auto researcher TrueCar.
“They're about to re-launch some of the defining vehicles for the Ford brand,” Mr. Lyman said. “That gives them the opportunity to reintroduce their products and their brand to the American consumer and get some momentum behind products that are so emotion-driven. People are passionate about Mustangs and trucks.”
This Bloomberg News report appeared on autonews.com, the website of Automotive News, a Detroit-based sister publication of Tire Business.