LOUISVILLE, Ky. (WDRB) – Darrin Bond wandered into the state employment office in downtown Louisville on a whim three years ago and found that Ford Motor Co. was looking for workers.
Bond, 54, was quickly hired at Kentucky Truck Plant as part of a wave about 2,000 employees brought on to build the redesigned Super Duty pickup trucks.
Like other recent hires, he started at $17 an hour and now makes almost $22, a wage that has afforded him stability and allowed him to buy an $80,000 modified shotgun house in New Albany.
But Bond still has about five years to go before reaching the $28 to $30 per hour wage of veteran Ford workers, who were hired before the automaker and its union adopted a two-tier wage system as the economic recession took hold in 2007.
At Ford's two Louisville plants, the blue-collar workforce of about 12,500 is now evenly split between long-tenured "legacy" employees who earn about $30 an hour or more and "in progression" employees like Bond, who start at $17 per hour and only reach the "traditional" wage if they stay with the automaker for eight years.
Bond and other employees – and leadership of their United Auto Workers union – would like bring the newer hires up to top wages faster.
"I would love to see people who do the same work make the same amount of money," Bond said in an interview last week. "… If we could overcome that, it would make me happier and it would make the broader portion of the membership happier."
The pay gap between newer and veteran workers is one of the key issues at stake in the four-year contract that Ford and the UAW began negotiating last month in Detroit.
Other flashpoints include Ford's desire to curb its generous healthcare plan for UAW workers and the growing use of temporary workers, a sort of third-tier group of employees with fewer protections and benefits.
Ford's 2015 contract with the union expires on Sept. 14, and the two sides hope to reach a deal workers can vote on this fall. UAW is also negotiating new labor deals with the other Detroit behemoths – FCA and General Motors – on a parallel track with Ford.
Frustration with the eight-year path to veteran pay is one of the reasons that Louisville's Ford workforce rejected the 2015 contract in that year's vote. The deal passed with a slim 51% majority after Ford workers outside Detroit put it over the top.
Ford's profits slipped last year, and the company says it's in the middle of a "restructuring" project to cut costs.
But in Louisville, the last decade has been prosperous as Ford's two plants surged to record employment. The turnaround has been remarkable considering that, in the late 2000s, Ford flirted with closing Louisville Assembly Plant.
Lower gas prices and shifting consumer tastes have favored the large SUVs and Super Duty trucks built at Kentucky Truck and the Escape crossover SUVs built at Louisville Assembly.
Now, workers want a bigger piece of the pie.
"Ford Motor Co. has seen years of growth and significant profitability since the 2015 negotiations," UAW International President Gary Jones said when labor talks kicked off July 15. "And I have heard loud and clear — at every Ford plant and local I visit — that they expect to share in the profits that their hard work and dedication has made possible."
Jones added that the union wants to "shorten" the grow-in period for new hires, saying eight years "is way too long to get to the top of the pay scale."
Ford's investment commitment to its plants – another facet of the labor deal – is particularly important to Louisville Assembly, which has production capacity after Ford cut its hourly crews from three to two and moved about 500 workers moving over to Kentucky Truck.
"Our focus is reaching a fair agreement with the UAW that allows the company to be more competitive so we can continue to preserve and protect good-paying manufacturing jobs and maintain our track record of investing in our U.S. plants," Ford spokeswoman Kelli Felker said in a prepared statement.
Ford and the UAW declined interviews for this story.
The negotiations are unfolding as observers say the auto industry is poised for a downturn after a robust recovery from the Great Recession.
"We are already seeing in the first half of 2019 sales are down, production is down, employment is down, and (we are) starting to see the signs of softening," said Kristin Dziczek, vice president of labor, industry and economics at the Ann Arbor, Michigan-based Center for Automotive Research.
Seeing leaner times ahead, the Detroit automakers are expected to focus on variable forms of the compensation like the annual profit-sharing checks that UAW workers receive based on Ford's North American results, Dziczek said.
That means automakers will resist regular wage increases and other fixed forms of pay.
"They want to make as much as possible contingent," Dziczek said. "When things are good, we will reward you. When things are bad, we don't want to get locked into higher costs."
Healthcare plan in Ford's crosshairs
A source close to Ford said the company's generous healthcare benefits – Ford picks up 97% of the tab, with workers paying no premiums, no deductibles and only modest co-payments – is the main reason Ford's total all-in costs for hourly employees is $5 to $12 higher than foreign competitors like Toyota who run non-union U.S. plants.
The company wants workers to pick up a bigger share of the burden or explore other ways to curb healthcare costs, such as a more limited network of doctors and other providers, the source said.
"They like to figure out a way to get better healthcare outcomes and maybe lower costs for workers in their plants," said Dziczek, of the Center for Automotive Research.
Workers counter that their solid healthcare plans are necessary because of work that is physical, repetitive and often performed in sweltering heat.
"It's a manufacturing environment; you are tearing your body down," said Shawn MacIntyre, 55, a Kentucky Truck Plant worker who joined Ford six years ago.
MacIntyre said he had to be assigned to a different job within the plant because of injuries to his hands from repetitive motions.
"You are making OK money, but it's at the expense of your health. Therefore, I think it's a good tradeoff that they give us good health benefits," he said.
Kelly Keith, a former waitress and gas station manager who got hired at Louisville Assembly in 2013, said workers should not be penalized because medical costs are outpacing the rest of the economy. She wishes the company would do more to reform the U.S. healthcare system through its advocacy on Capitol Hill.
"They lobby Congress for their tax breaks and everything else, so why can't they go lobby Congress to get these healthcare costs under control?" she said.
Growing reliance on temporary workers
The union also aims to rein in Ford's use of temporary workers, who now make up about 6% of Ford's 55,000 hourly workers, up from 1% four years ago.
In Louisville, the share of temps is even higher. There about 1,000 between the two plants, or 8% of the local workforce.
The temps – grouped into categories called "temporary-part time" (TPT) and "short-term supplemental" (STS) – are Ford employees and UAW members like full-time workers, but there are key differences.
Temps get no job guarantees, no paid time off and less comprehensive healthcare benefits. Some get prescription drug coverage while others do not.
And temps do not get the annual profit-sharing bonuses that have averaged $8,210 per Ford worker since 2012.
The inequities bother many plant workers.
Keith, the Louisville Assembly Plant worker, said in 2018 she decided to share some of her profit-sharing bonus with a temp who worked near Keith on the assembly line. That year, the bonuses were worth $7,500 before taxes.
Keith said she put $100 in a greeting card and gave it to the temp worker "and told her how much I appreciated her." (The worker, who is still employed at the plant, did not respond to WDRB's requests for comment).
"This girl worked next to me every day," Keith said. "She comes into work. She never misses. She's got bills just like everybody else."
"She just wants a good job like everybody else," she said.
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