New Sourcing Language Designed to Bring Work Into Plants
Investment in UAW Ford people and UAW Ford products was a top priority for our UAW negotiating team during this round of bargaining.
The company has agreed to a moratorium on outsourcing, which will protect the jobs of thousands of UAW Ford members. In addition, modifications in this contract – including an entry-level wage for a limited number of UAW Ford workers and the restructuring of retiree health care costs – will make our facilities more competitive and support our plan to win work for our plants.
Building on achievements in previous contracts, UAW negotiators won enhanced commitments to UAW participation in product sourcing decisions. With input at every level of the sourcing process, UAW Ford members will be positioned to take maximum advantage of our new, more competitive cost structure in order to win new work at our facilities.
UAW Representation on Future Product Sourcing
Our bargaining team won language that will add UAW Future Product Sourcing Representatives to the UAW National Ford Department. These union representatives will ensure we have early and direct involvement in all insourcing and outsourcing decisions in the company’s product development system. They will have access to information concerning business planning, marketing, purchasing, design, engineering and manufacturing.
Commitment on New- Technology Vehicles
Our bargaining team at Ford won a commitment from the company to invest in new technologies, such as hybrid vehicles and alternative fuels and their components, in UAW-represented Ford facilities when a competitive business case exists.
Sourcing Language Strengthened
In order to improve our ability to win work for our facilities, our bargaining team won several enhancements in the sourcing language contained in Appendix P to the UAW-Ford labor agreement.
• The union will now have the ability to present all business cases related to insourcing opportunities directly to applicable company decision-making parties.
• The UAW National Ford Department and UAW Ford local unions will now receive all requests for quotation packages before an outside supplier during a market test study. This will allow more time for our local committees to prepare a solid business case for protecting work at our facilities.
• To ensure our facilities have the ability to insource more products, language was added to address work that is temporarily brought in to one of our locations. If the work stays at Ford for more than 12 months, it will be considered UAW Ford work and subject to contractual provisions on outsourcing. This will enhance the ability of local unions to permanently retain this work and allow our plants to become more competitive based on capacity.
• The company will now provide data to the union regarding the sourcing of major vehicle components in electronic format, to be updated on a regular basis. This will provide UAW representatives with timely and accurate information regarding the sourcing and costs of work that can be considered for insourcing.
Financial Data Process Improved
Your bargaining team won a major victory by improving the local union’s ability to develop competitive business plans and win work for our facilities. When the company compares the cost of doing business at a UAW Ford facility versus an outside supplier, it no longer may consider costs not directly associated with the components being analyzed. The company must also reflect any Job Security Program (JSP) costs associated with a sourcing action as a negative cash flow against vendor pricing.
The company can no longer set an unrealistic Time-Adjusted Rate of Return (TARR) hurdle rate to stop us from insourcing work at UAW Ford facilities. The company will now use the same TARR hurdle rate established for global sourcing decisions.
Online Training Enhanced
Negotiators won a commitment for online training for UAW local union officers and job security representatives who are involved in sourcing decisions. The goal of the training is to gain access to interactive, real-time financial tools that will allow UAW representatives to make the most effective case for retaining and insourcing work in UAW facilities.
All Costs on the Table for Cost Reduction;
Job Protection and Insourcing Efforts
Ford Motor Co., like most companies, had a history of eliminating jobs first as a way to be competitive. National negotiators went into this set of bargaining insisting all costs in all areas of the business – rather than just labor costs – should be included in competitive studies. As a result, we have language to aid job protection and insourcing efforts.
Local union leadership will be involved in the plant’s cost reduction efforts from the beginning, using a “four walls” approach that considers all costs in addition to labor hours per unit.
It is expected that increasing efficiencies through the Total Cost process will not only save jobs, but make plants more competitive so that Local Job Security Operational Effectiveness Committees will be able to better make business cases to add business and jobs at the local level.