November 8, 2012 / 7:33 PM / 6 years ago

UPDATE 1-Entry-level wages, higher output cut Ford costs

By Deepa Seetharaman
    WAYNE, Mich., Nov 8 (Reuters) - Ford Motor Co has been
able to lower its manufacturing costs this year by hiring more
entry-level workers and boosting its capacity utilization in
North America to 114 percent. 
    So far this year, the second-largest U.S. automaker has
hired 4,800 entry-level workers, who start at $15.78 an hour. In
all, Ford has hired 5,200 workers this year.
    "Our manufacturing costs have gone down this year one is
capacity utilization and the other is entry level," said Jim
Tetreault, head of manufacturing in North America. "There's no
question, those two things have lowered our costs this year."
    Entry-level workers make about $12 less than veteran workers
under a two-tier wage system enshrined in the 2007 contract
between the United Auto Workers and the three U.S. automakers. 
    Workers can earn $19.28 an hour after two years. Traditional
unskilled UAW workers at Ford earn an average of just over $28.
    At the Chicago Assembly Plant, for example, Ford new workers
are, on average, 25 years old, "lower than we've ever hired in
the past," Tetreault said. In general, many of them have never
worked in a factory before and must be trained on all aspects of
the job, including on how to hold a tool that screw in bolts.
    "We have to teach them what a quality job is," he said.    
    Chicago Assembly is one five Ford plants operating on a
three-shift schedule. Ford's other North American plants are on
two shifts with many of them also including overtime.
    Based on a two-shift, eight-hour schedule, Ford's capacity
utilization is about 114 percent, higher that at any point in
Tetreault's more than 30 years at Ford, he said.
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