Ford Motor Company (NYSE:F) will invest $400 million in its KC Assembly Plant under the tentative labor deal with the United Auto Workers. The deal comprises $6 billion in product commitments, which the United Auto Workers believes will result in a minimum of 8,500 secured or jobs.
Closure of engine plant in Michigan
Ford Motor reported that as part of a tentative deal with the UAW, it could close an engine plant in Michigan. The 600 hourly staff at the Michigan plant will be given jobs at an adjacent transmission plant or buyouts. In March 2017, the automaker stated that it was investing $150 million in the Michigan Plant for new tooling for components and boost capacity for engines.
Unlike Ford, General Motors Company (NYSE:GM) suffered a 40-days strike by its U.S. hourly employees that cost around $3 billion before getting the nod for a new labor agreement. The strike ended after the union settled to a new deal with General Motors that included guarantees, raises to get some temporary staff permanently, and a better wage schedule to reduce the gap between longtime employees and new hires.
Amidst all these developments, Gary Jones, the President of UAW, reported that he was going on a sabbatical. He is one of many high-ranking union executives targeted in a federal corruption probe. Jones kept a low profile during the discussions at GM but reported he was taking a sabbatical as UAW employees at Ford prepare for a difficult ratification vote.
Jones has remained under mounting pressure after being connected to the scandal that has swamped the union in the last two years. As of now, he has not been alleged with any crimes.
Jones stated that the UAW is fighting hard to ensure their members have a secure future. Rory Gamble, the head of the UAW’s Ford Department, is appointed as acting president. He will oversee approval of the union’s tentative deal with Ford, which will enable the automaker to close a plant in Romeo, while investing funds in other plants, including an assembly facility in Flat Rock, Michigan, and a stamping facility in Buffalo, NY.