The United Auto Workers (UAW) union may not get the chance to demand wage increase in their upcoming contract negotiations as the small cars production is about to move abroad.
These small cars are desperately struggling for the profitability in the U.S. market and three of the auto manufacturing giants, General Motors Co., Fiat Chrysler Automobiles and now Ford Motor Co., are exerting efforts to, somehow, keep up with Asian auto markets.
These markets showing the advantage of weaker currencies as compared to the U.S. dollar and managed to keep the production costs low.
Ford Focus new
All the auto makers are making handsome profit with the pickup trucks and sport utility vehicles (SUVs), but small cars, on the other hand, Ford Focus for instance, deliver lower profit margins but enables the car manufacturers to fulfil the strict fuel economy mandates.
In order to return the small car production to the U.S. by lowering the labour costs, the auto manufacturers have won concession from the United Auto Workers (UAW) in both, before and after the financial crisis.
Ford Michigan Assembly
The biggest examples of this are the Chevrolet Sonic from GM and Focus from Ford, both of them are manufactured in the Michigan Assembly Plant. There are 4,400 workers building petrol, electric and hybrid versions of Ford Focus and Ford C-Max at Ford’s Michigan Assembly Plant (MAP).
This is the same plant which had been used to build SUV’s and trucks but when the petrol prices dropped, Ford decided to shift the facility to produce small vehicles. The whole facility undergone complete retooling for that, but now the changing conditions forced them to shift the production plants to Mexico.
