Ford Motor Co., slated to begin contract talks with the United Auto Workers union in two weeks, plans to move production of two small cars outside of the U.S. from a Michigan factory, according to a person familiar with the matter.
The shift will occur in 2018, Ford said in an e-mailed statement Thursday, without saying where. Leaflets posted by UAW members at the Wayne, Michigan, plant said the Focus compact and C-Max hybrid will be produced in a foreign country, according to the person, who asked not to be identified revealing union communications. The company declined to comment on a location.
Ford already has laid off a shift of 700 workers in Wayne, as U.S. sales fell 3.2 percent for the Focus and 17 percent for the C-Max in this year’s first half. Small cars and hybrids have become a hard sell as U.S. gasoline prices have fallen 24 percent from a year earlier to an average $2.76 a gallon.
“We actively are pursuing future vehicle alternatives to produce at Michigan assembly and will discuss this issue with the UAW leadership as part of the upcoming negotiations,” Dearborn, Michigan-based Ford said in the statement.
Jimmy Settles, the UAW vice president who oversees relations with Ford, said that “we are extremely confident that a new product commitment will be secured during the upcoming 2015 negotiations and that the Michigan Assembly Plant will maintain a full production schedule,” His comment was in a letter posted on the UAW-Ford Facebook page.
Talks with the UAW are scheduled to start on July 23 to replace a contract that expires in September. Ford wants to lower its labor costs, which it says are uncompetitive. Ford’s average U.S. hourly labor expense, including benefits, is $57, about $9 more than at Toyota Motor Corp. and Fiat Chrysler Automobiles NV’s U.S. unit, according to the Center for Automotive Research in Ann Arbor, Michigan.