Americans rebounded from a weak holiday season and stepped up spending on retail goods in January. The latest government report on retail sales pointed to a slowly improving economy. Retail sales rose at a seasonally adjusted 0.SOUTHFIELD, Mich. – Ford’s $1.6 billion U.S. investment plan will retool plants to build fuel-efficient autos to compete with Toyota models. Hiring workers paid on par with Toyota’s will have to wait.
After cutting 47 percent of its North American workforce since 2006, Ford isn’t ready to resume adding employees even as it upgrades factories and grabs a larger share of U.S. sales, Chief Financial Officer Lewis Booth said. One analyst estimates Ford might not hire for two years.
Ford’s jobless recovery shows the constraints on the only U.S. automaker to avoid bankruptcy in 2009. With fewer employees taking buyouts and auto demand about a third less than in 2007, Ford doesn’t have openings for a new class of lower-paid union workers who would help cut labor costs.
“It’s probably just a little premature to talk about hiring,” Booth said. “The first thing to do is to take our existing employees and make sure they’re fully occupied. That’s very important for us and very important for them.”
Toyota, the world’s largest automaker, was the benchmark for labor costs when General Motors, Chrysler Group and Ford reached their current accords in 2007. The companies won the right to give fewer benefits to new hires and pay them about $14 an hour, half what current employees make.
Compensation for U.S. workers including wages and benefits averages about $55 an hour at Ford, compared with $50 at Toyota, according to Booth.
Because laid-off union employees are first in line for any vacancies before new, low-wage hires can be made, Ford can’t yet take advantage of low-wage hiring. Ford said it has about 600 hourly employees still on indefinite layoff from a U.S. union workforce of about 41,000. On Feb. 16, Ford said it will cut a shift of 900 workers from its Michigan Mustang factory in July.
Ford probably won’t begin hiring for two years, which means it wouldn’t match Toyota’s labor rates until 2014 or 2015, said Sean McAlinden, chief economist at the Center for Automotive Research in Ann Arbor, Mich.
“The market sucks and it needs to recover by 30 percent to 40 percent before Ford can hire,” McAlinden said. “They have too many hourly workers now.”
