Ford to transition up to 500 workers to higher pay bracket

Associated Press

DETROIT

Ford Motor Co. is moving several hundred U.S. hourly workers into a higher pay bracket after surpassing a cap on the number of lower-wage workers it can hire.

Ford said Wednesday that up to 500 workers will transition from an entry-level wage of $19.28 per hour to a top-tier wage of $28.50 per hour over the next two months. The first workers will get word this week. The majority of the workers affected are at plants in Chicago; Kansas City, Mo.; and Louisville, Ky.

Ford, General Motors Co. and Chrysler Group — now Fiat Chrysler Automobiles — established separate wages and benefits for new employees and veteran ones as part of their 2007 contracts with the United Auto Workers union. Initially, there were caps on the number of lower-wage workers at each of the companies, but the caps at GM and Chrysler were suspended in 2009 as part of those companies’ bankruptcy reorganizations.

Ford still has a cap of 20 percent, and it will surpass that this quarter with the hiring of 1,550 new workers to support pickup- truck production in Kansas City and Michigan, according to Bill Dirksen, Ford’s vice president of labor affairs. Ford has a total of 50,000 hourly workers.

Ford’s total percentage of entry-level workers actually is closer to 28 percent because it got credits for in-sourcing work that used to be outsourced. At Fiat Chrysler, 42 percent of the 35,700 U.S. hourly workers are entry-level, giving it a big labor-cost advantage over Ford. Less than 20 percent of GM’s 50,300 U.S. hourly workers are entry-level.

Two-tier wages, established when the Detroit automakers were losing money, have been a sore point for some in the UAW, especially now that the automakers are profitable again. UAW President Dennis Williams has vowed to try to bridge the gap between entry-level pay — which starts around $16 per hour — and top-tier pay during contract talks with the automakers later this year.