Ford CEO Accuses UAW of Holding Up Labor Agreement Over Battery Plant Wages

Ford Motor Chief Executive Jim Farley has raised allegations against the United Auto Workers (UAW) union, claiming they are obstructing the negotiation of a new U.S. labor agreement to pressure Ford into granting equivalent wages for workers at new battery plants compared to those at assembly plants.

Battling Over Wages: 

Farley’s accusation revolves around the UAW’s demand for equal pay for workers at battery plants, causing friction in labor negotiations. 

The contention is that this demand could have significant implications for the financial viability of some U.S. vehicle production.

Ford is also waiting for “final language” from the U.S. Treasury regarding the eligibility of tax credits for batteries produced at a planned Michigan plant, which intends to use Chinese technology. The decision on tax credits is crucial for the future of the project.

UAW’s Response: 

UAW President Shawn Fain has countered Farley’s claims, asserting that the negotiations are far from resolved. 

Core economic proposals, including job security during the electric vehicle (EV) transition, remain contentious discussion points.

Ford recently announced a pause in constructing its $3.5 billion Marshall, Michigan battery plant. The decision was prompted by concerns about the plant’s competitiveness in the market.

Legislative Hurdles: 

In 2022, Congress passed the Inflation Reduction Act (IRA), which imposes restrictions on future consumer EV tax credits if battery components are associated with a “foreign entity of concern.” 

Ford is eagerly awaiting guidance on whether the batteries produced in the Marshall plant meet the specified requirements.

Ford’s Warning: 

Ford had previously communicated concerns to Treasury Secretary Janet Yellen and Energy Secretary Jennifer Granholm regarding the potential impact of an unfavorable interpretation of the foreign entity provision. 

This could lead to reduced battery production in Michigan and affect EV assembly plants outside the state, potentially resulting in fewer U.S. jobs.

Congressional Scrutiny: 

This week, chairs of three U.S. House committees have requested documents related to Ford’s partnership with Chinese battery company CATL. 

Republican lawmakers have expressed concerns over the possibility of U.S. tax subsidies being directed to China and Ford’s dependence on Chinese technology in this context.

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