Tensions Flare Over Carmakers Restarting Plants Weeks From Now
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Ford Motor and Fiat Chrysler Automobiles must overcome skepticism from the United Auto Workers union as they plan to restart production at some U.S. plants roughly a month after shutting them down.
© Bloomberg Signage is displayed outside the idled Ford Motor Co. Michigan Assembly plant in Wayne, Michigan, U.S., on Monday, March 23, 2020. The auto industry is escalating its push for U.S. assistance to help weather the impact of a global pandemic that has halted or will soon stop production at 42 out of 44 plants that assemble vehicles in the country.
After halting North American output last week as the coronavirus spread across the U.S., the carmakers said Thursday they will keep their factories shut until at least April 14. Ford announced several key facilities it plans to reopen on that date, while Fiat Chrysler said its decisions will depend on states’ stay-in-place orders and the readiness of each plant.
“We are reviewing with great concern and caution today’s announcement,” the UAW said within 40 minutes of Ford releasing its statement. Rory Gamble, the union’s president, added later: “The only guideline in a boardroom should be management asking themselves, ‘Would I send my family -- my own son or daughter -- into that plant and be 100% certain they are safe?’”
Tension between the UAW and carmakers is likely to remain high as Ford, Fiat Chrysler and General Motors Co. seek to get assembly lines running again. Two union members who worked at Fiat Chrysler plants in Michigan and Indiana died after contracting Covid-19, and the companies have confirmed several other coronavirus cases among their staff. GM doesn’t have firm return-to-work dates at this time, a spokesman said.
© Bloomberg Signage is displayed outside the idled Ford Motor Co. Michigan Assembly plant in Wayne, Michigan, U.S., on Monday, March 23, 2020. The auto industry is escalating its push for U.S. assistance to help weather the impact of a global pandemic that has halted or will soon stop production at 42 out of 44 plants that assemble vehicles in the country.
Ford said it will put in place additional safety measures to protect returning workers as it brings the plants back online. A Ford employee at a plant in Wayne, Michigan, tested positive for the virus earlier this month.
“I wouldn’t have any problem returning to work as long as the company, in conjunction with the union, takes some common-sense precautions to allow the workers to protect themselves,” said Brian Pannebecker, 60, a forklift operator at a Ford axle plant in Sterling Heights, Michigan. He would specifically like the automaker to distribute protective gloves and provide sanitary wipes so that staffers can keep their work areas clean.
The shutdowns are leading to financial hardship, even with union benefits that give members about 85% of their usual take-home pay, according to Pannebecker. Some factories were running on overtime before the companies idled them.
“I’ve been working seven days a week, 12-hours a day right up until the day we were laid off,” he said. “It’s a big change to go from those kind of paychecks to 85% of a 40-hour week. It’s a challenge and a big adjustment.”
Credit Shock
The plant closings also have pressured automakers’ finances and contributed to S&P Global Ratings downgrading Ford to junk on Wednesday. Fiat Chrysler set up a new $3.86 billion credit line, while Daimler AG is said to be in talks with banks to arrange an at least 10 billion euro facility.
After Ford suspended its dividend, drew down $15.4 billion from two credit lines and retracted the earnings guidance given to investors on Feb. 4, its management is sharing in the sacrifice.
Effective May 1, top executives’ base salaries will be put off by at least five months, Ford said in a regulatory filing. The deferrals apply to Executive Chairman Bill Ford’s entire salary and half of the base pay for Chief Executive Officer Jim Hackett, Chief Operating Officer Jim Farley and Chief Financial Officer Tim Stone.
The executives will receive their deferred salary amounts after the company has repaid at least $7 billion of its automotive debt, according to the filing.
CEO’s Memo
Hackett, 64, said in a letter to employees Thursday that the deferrals will apply to the top 300 senior executives at Ford.
While the company may pare back work schedules and compensation for people whose jobs can’t be done effectively away from Ford’s facilities, the goal is to manage through the crisis without eliminating jobs, he said.
“If the effects of the coronavirus on the global economy and Ford go on for longer -- or are more severe -- than we currently anticipate, we may have to take tougher actions,” Hackett wrote. “But not today.”
Keith Naughton and Gabrielle Coppola
4 hrs ago
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Ford Motor and Fiat Chrysler Automobiles must overcome skepticism from the United Auto Workers union as they plan to restart production at some U.S. plants roughly a month after shutting them down.
© Bloomberg Signage is displayed outside the idled Ford Motor Co. Michigan Assembly plant in Wayne, Michigan, U.S., on Monday, March 23, 2020. The auto industry is escalating its push for U.S. assistance to help weather the impact of a global pandemic that has halted or will soon stop production at 42 out of 44 plants that assemble vehicles in the country.
After halting North American output last week as the coronavirus spread across the U.S., the carmakers said Thursday they will keep their factories shut until at least April 14. Ford announced several key facilities it plans to reopen on that date, while Fiat Chrysler said its decisions will depend on states’ stay-in-place orders and the readiness of each plant.
“We are reviewing with great concern and caution today’s announcement,” the UAW said within 40 minutes of Ford releasing its statement. Rory Gamble, the union’s president, added later: “The only guideline in a boardroom should be management asking themselves, ‘Would I send my family -- my own son or daughter -- into that plant and be 100% certain they are safe?’”
Tension between the UAW and carmakers is likely to remain high as Ford, Fiat Chrysler and General Motors Co. seek to get assembly lines running again. Two union members who worked at Fiat Chrysler plants in Michigan and Indiana died after contracting Covid-19, and the companies have confirmed several other coronavirus cases among their staff. GM doesn’t have firm return-to-work dates at this time, a spokesman said.
© Bloomberg Signage is displayed outside the idled Ford Motor Co. Michigan Assembly plant in Wayne, Michigan, U.S., on Monday, March 23, 2020. The auto industry is escalating its push for U.S. assistance to help weather the impact of a global pandemic that has halted or will soon stop production at 42 out of 44 plants that assemble vehicles in the country.
“I wouldn’t have any problem returning to work as long as the company, in conjunction with the union, takes some common-sense precautions to allow the workers to protect themselves,” said Brian Pannebecker, 60, a forklift operator at a Ford axle plant in Sterling Heights, Michigan. He would specifically like the automaker to distribute protective gloves and provide sanitary wipes so that staffers can keep their work areas clean.
The shutdowns are leading to financial hardship, even with union benefits that give members about 85% of their usual take-home pay, according to Pannebecker. Some factories were running on overtime before the companies idled them.
“I’ve been working seven days a week, 12-hours a day right up until the day we were laid off,” he said. “It’s a big change to go from those kind of paychecks to 85% of a 40-hour week. It’s a challenge and a big adjustment.”
Credit Shock
The plant closings also have pressured automakers’ finances and contributed to S&P Global Ratings downgrading Ford to junk on Wednesday. Fiat Chrysler set up a new $3.86 billion credit line, while Daimler AG is said to be in talks with banks to arrange an at least 10 billion euro facility.
After Ford suspended its dividend, drew down $15.4 billion from two credit lines and retracted the earnings guidance given to investors on Feb. 4, its management is sharing in the sacrifice.
Effective May 1, top executives’ base salaries will be put off by at least five months, Ford said in a regulatory filing. The deferrals apply to Executive Chairman Bill Ford’s entire salary and half of the base pay for Chief Executive Officer Jim Hackett, Chief Operating Officer Jim Farley and Chief Financial Officer Tim Stone.
The executives will receive their deferred salary amounts after the company has repaid at least $7 billion of its automotive debt, according to the filing.
CEO’s Memo
Hackett, 64, said in a letter to employees Thursday that the deferrals will apply to the top 300 senior executives at Ford.
While the company may pare back work schedules and compensation for people whose jobs can’t be done effectively away from Ford’s facilities, the goal is to manage through the crisis without eliminating jobs, he said.
“If the effects of the coronavirus on the global economy and Ford go on for longer -- or are more severe -- than we currently anticipate, we may have to take tougher actions,” Hackett wrote. “But not today.”