DETROIT -- Two-tier wages, negotiated with the UAW in 2007, helped Ford Motor Co. and its Detroit competitors survive the devastating economic downturn that nearly destroyed the domestic automobile industry.
Now that Ford is churning out profits, Joe Hinrichs, Ford's president of the Americas, knows the two-tier structure will be a key issue in 2015 contract talks with the UAW. But Hinrichs, Ford's head of manufacturing in 2007 and a key player in that year's contract talks, believes it would be risky to mess with elements of the successful formula that helped bring Ford, General Motors and Chrysler back from the brink -- including the two-tier structure.
"Certainly the business has improved dramatically, and everyone has shared in that with record profit sharing for our UAW employees," Hinrichs said in an interview this month. "The other important thing is that we've in-sourced thousands of jobs consistent with that agreement.
"How do we keep the elements that have been beneficial to everybody in this discussion [and] keep our wages and our labor competitive so we can continue to invest in our plants here in the United States?"
In 2013, Ford reported a pretax profit of $8.6 billion. In February, Hinrichs hailed the result as "one of our best years ever." Ford reported a $1.4 billion pretax profit in the first quarter of 2014. Profit-sharing checks paid to Ford workers averaged $8,800 this year for their performance in 2013, according to the Center for Automotive Research in Ann Arbor, Mich.