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Ford Reduces Wages Under New UAW Pact: In the ball park!

By Amarendra Bhushan for CEOWORLD Magazine Updated:March 11, 2009

The United Auto Workers (UAW) and Ford Motor Co. have come to an agreement on concessions the union is making to ensure the financial stability of the automaker.

The concessions include freezing wages and cutting other benefits in a move to help the automaker remain competitive.

Ford is not seeking government funding and is the first US automaker to come to an agreement with the union.

- Ford Motor Co. will save $500 million annually from the concessions.
- Ford’s blue-collar labor costs are at $55 an hour and should continue to drop with more buyouts.
- Fifty-nine percent of Ford’s production workers and 58 percent of skilled-trades employees agreed to the changes to the contract. which protect their wages but suspend bonuses, alter work rules and essentially kill a controversial lay-off program called the jobs bank.
- Currently, Ford’s labor costs amount to a little more than $60 an hour, including health care for retirees.
- Ford is the only Detroit automaker not borrowing money from the federal government. General Motors and Chrysler have received $17.4 billion since December and want a total of $39 billion to help them avoid bankruptcy.

“This gets us within the ballpark of where the transplants are,” Joseph R. Hinrichs, Ford’s group vice president for global manufacturing and labor affairs, said. “With the buyouts and with the ability to leverage some of the other tools that are in this agreement, we think we can get there in the next couple of years, on parity with the transplants.

Who is Joseph R. Hinrichs?

Group Vice President, Global Manufacturing and Labor Affairs, Ford Motor Company

Joe Hinrichs, 42, is group vice president, Global Manufacturing and Labor Affairs, Ford Motor Company. He is responsible for the operations of 105 assembly, stamping and powertrain plants worldwide.

He oversees the company’s worldwide engineering support for the stamping function as well as vehicle and powertrain manufacturing. He has global responsibility for the company’s Material Planning & Logistics, Ford Production System, Manufacturing Business Office and Labor Affairs organizations. Additionally, Hinrichs is responsible for Automotive Components Holdings, the Ford-managed temporary business entity comprised of former Visteon Corp. plants and facilities in the United States and Mexico.

He assumed the worldwide position on Jan. 1, 2008. Hinrichs reports to Alan Mulally, president and chief executive officer.

From September 2006 to December 2007, Hinrichs was vice president, North America Manufacturing. From October 2005 to September 2006, he was vice president of Vehicle Operations, responsible for 19 assembly plants and eight stamping and tool and die plants in Canada, Mexico and the United States.

Prior to that, Hinrichs served as president and CEO of Ford Motor Company of Canada, Limited. There, he led Ford of Canada’s operations, including the national headquarters, six regional sales offices, five vehicle assembly and engine manufacturing plants, two parts distribution centers, and affiliates including Ford Credit, Jaguar, Volvo, Land Rover and Hertz.

Before moving to Canada, Hinrichs was director of manufacturing, Vehicle Operations, responsible for the manufacturing, quality, and launch of several Ford sport utility vehicles and trucks produced at six assembly plants.

Hinrichs was executive director of the company’s Material Planning and Logistics organization, from April 2002 to July 2003. In this capacity, he was responsible for material planning, production control, scheduling, inventory management, logistics and total material flow at all Ford’s manufacturing facilities worldwide.

Hinrichs joined Ford in December 2000 as plant manager of the Van Dyke Transmission Plant in Sterling Heights, Michigan.

Prior to joining Ford, he was a partner and senior vice president of Ryan Enterprises Group, a manufacturing investment group in Chicago. Early in his career, Hinrichs spent 10 years at General Motors in various positions in engineering and manufacturing, including plant manager.

He was the recipient of the 2008 Shien-Ming Wu Manufacturing Leadership Award which recognizes manufacturing leaders for their visionary and strategic thinking, courage and impact on the manufacturing industry. He was also named to Automotive News’ 2007 All-Stars for Manufacturing. He was recognized for leading Ford’s North American manufacturing team to help boost vehicle quality and improve plant productivity.

He was co-chairman of the 2006 – 2008 Michigan March of Dimes WalkAmerica campaigns, co-chair of Ford’s 2008 Juvenile Diabetes campaign, honorary co-chair for the Arthritis Foundation’s Michigan Chapter’s Tribute to Excellence, and operating chairman of the Boy Scouts of America’s 2007 and 2008 Friends of Scouting Leadership campaigns.

Born in Columbus, Ohio, Hinrichs earned a bachelor’s degree in electrical engineering magna cum laude from the University of Dayton (Ohio) in 1989, and a master’s degree in business administration from the Harvard Business School in 1994 as a GM Fellow. Hinrichs and his wife, Maria, have three children.

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