Ratification of UAW Contract has Ford Renewing EV Production

Photo Source: Ford

Members of United Auto Workers union (UAW) ratified the tentative deals in late October 2023 with Ford, General Motors, and Stellantis following six weeks of strikes against the Detroit “Big Three.” The new contracts will run through April 2028 and include a 25 percent increase in base wages and cost-of-living adjustment (COLA) payments. Even though the ratifications will ease tensions in the manufacturing and supply chain, the three automakers and their suppliers will now be under pressure to get their facilities back up and running.

Details of Ford’s Ratified Deal

An essential aspect of the deal included an $8.1 billion investment into the brand’s plants by the end of the agreement, particularly to help the transition to electric vehicles. Ford CEO Jim Farley previously stated that the company will continue to make and sell hybrids for the foreseeable future, even if that does not necessarily include plug-in hybrids. Ford envisions at least three new electric vehicles that will preserve jobs at various factories. As mentioned under the new agreement, the company will significantly increase pay, benefits, and improve job security. 

It is worth noting that the agreement also provides a blueprint for which cars and trucks the Blue Oval intends to assemble in the coming years and where it will do so. Several of the plans will continue the manufacture of vehicles that the automaker already builds. To that end, the production of some new vehicles over the next few years is also being planned. 

The UAW’s success in gaining commitments from the company to build new electric vehicles at numerous factories represents a particular achievement. To clarify, the expansion of electric vehicle production will preserve jobs and could create new ones, depending on how quickly the nation transitions from internal combustion engines to batteries.

Long-Term Plans

The automaker has embraced the shift to electric vehicles as a large-scale and long-term commitment. The company has set a goal of having electric vehicles represent approximately half its U.S. sales by the 2030 model year. Adopting the same objective, the Biden administration’s 2022 Inflation Reduction Act increased federal tax credits to buyers of new and used electric vehicles. 

What is not yet known is whether consumer demand for electric vehicles in the coming years will justify the automaker’s plans to accelerate production. However, Kumar Galhotra, president of Ford Blue, has high hopes, adding that he expects hybrid sales to remain strong well into the next decade. In the meantime, Ford is moving ahead with its ambitious electric vehicle production plans. 

According to contract highlights released by the UAW, a new electric truck will be built in an electric vehicle plant inside Ford’s Rouge complex in its hometown of Dearborn, Michigan. Additionally, at the Kentucky Truck Plant in Louisville, Ford will add gas-electric hybrid variants of the Lincoln Navigator and the Expedition SUVs. Another assembly plant in Louisville that now makes Ford Escape and Lincoln Corsair small SUVs will get an unspecified new electric vehicle.

Moreover, according to Ford Authority, “production of the HF45 and HF55 gearboxes will continue at the Van Dyke Electric Powertrain Center – formerly known as the Van Dyke Transmission plant – following a $230 million dollar investment into that facility. These gearboxes are currently utilized in the Ford Maverick Hybrid, as well as hybrid versions of the Ford Escape and Lincoln Corsair.”

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