Ford has 'reached our limit' on UAW contract proposal

A top Ford Motor Co. executive on Thursday said the company had reached the limit of what it could offer the UAW economically in a new labor contract but remained hopeful it could reach an agreement that meets some of the union's priorities.

The automaker's most recent offer to the UAW includes raises totaling 23 percent for hourly employees, reinstated cost-of-living adjustments and a $21 starting wage for temporary workers. It also would get new hires to top wages in three years instead of eight.

Kumar Galhotra, president of Ford Blue, told reporters Thursday that the automaker can't improve that offer without becoming uncompetitive.

"We have reached our limit," Galhotra said. "We've actually stretched ourselves to get to this point. … We're open to moving some money around within the deal that might fit the union's needs better. But broadly speaking, from an overall cost of the deal perspective, yes, we're there."

UAW leaders met with Ford on Wednesday seeking more favorable terms, and when the company did not present a better economic offer, the union ordered workers to go on strike at Ford's largest and most profitable assembly operation, the Kentucky Truck Plant.

Galhotra on Thursday said company officials were surprised by the move, and he denied that Ford had told the union it would improve its proposal.

"Going further will hurt our ability to invest in the business like we need to invest," Galhotra said.

The move marks a major escalation of the four-week-old strike, which currently involves about 34,000 out of the 146,000 UAW members across the Detroit 3. Ford said the Super Duty, Expedition and Lincoln Navigator built at Kentucky Truck generate $25 billion in annual revenue.

The company said more than 600 suppliers are connected to the plant and that its shutdown could have ripple effects on some 100,000 workers.

"We know UAW leadership set out to wound Ford for months," Galhotra said, referencing leaked messages from the union's communications director. "But this goes way beyond just hitting Ford's profits."

Colin Langan, an analyst at Wells Fargo, said Wednesday's escalation could be a positive sign that the negotiations were nearing a conclusion.

"UAW leadership likely needs to strike Ford's most profitable plant to show the rank-and-file that they are extracting the most from the automaker," he wrote. "Consequently, we think this escalation is a sign that the UAW could be close to a contract proposal with Ford in the next 1-2 weeks."

The UAW was meeting Thursday with Stellantis. It was unclear if Stellantis was presenting a new offer to the union or if the UAW would expand its strike against it.

UAW President Shawn Fain has scheduled a Facebook Live broadcast Friday morning to give an update on negotiations.