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Ford in Talks for New Labor Pact in Mexico

June 9, 2008
A trade union in Mexico is negotiating a new contract for workers at Ford Motor Co.’s Cuautitlan plant, where the automaker plans to assemble the new Ford Fiesta car in 2010.

“We are hoping to get a new contract, and we are in talks, but it’s important for the company to be competitive,” Juan Jose Sosa, general secretary of the union in Cuautitlan and Chihuahua, told Automotive News.

The Cuautitlan plant employs 650 hourly workers, who earn an average of 47.59 pesos ($4.62) an hour, Sosa said.

“We have eight levels, starting from 26 pesos [$2.52] an hour and rising to 61 pesos [$5.92] an hour,” he said.

Ford is likely to add 2,000 hourly workers in Cuautitlan the next two years, Sosa said.

Mexican union leaders such as Sosa acknowledge taking wage cuts for their members and making concessions to land projects like the Fiesta.

“We are going to have to sacrifice something in order to continue to be competitive” with China and other countries, Edgar Arroyo, a union leader at the General Motors plant in Toluca, told the Associated Press last week.

“It’s a double-edged sword,” Ben Davis, country program director for the AFL-CIO Solidarity Center in Mexico, said in an interview.

“There’s a lot of new investment, and I feel Mexican workers have as much right to a good job as workers in the U.S. They’re getting jobs but not good jobs. And this is a reflection of the long-standing policy of keeping wages down and the workers under control.”

Sosa said Ford hourly workers’ wages and benefits in Cuautitlan are 23 percent higher than those of their peers at rival automaker assembly plants in Mexico.

Sosa said Ford plans to assemble 360,000 vehicles a year in Cuautitlan. F-series pickups are built there. Sosa said truck production will end between August and December.

The new Fiesta is part of a $3 billion investment program in Mexico announced by Ford and its suppliers last month. Ford CEO Alan Mulally said the investment will create 4,500 jobs at Ford plants in Mexico and 25,500 jobs among suppliers in the country.

The project includes a new transmission plant in Irapuato, in a joint venture between Ford and German supplier Getrag, and an extension of an engine plant in Chihuahua.

Mulally said Ford’s total contribution to the investment will be $2.4 billion, while suppliers will invest the remainder.

Filed by Stephen Downer of Automotive News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.