This week the second largest US automaker reported a massive jumped in second quarter earnings mainly buoyed by the performance in North America, which could lead the UAW union to shout even harder “it’s our time”.
The three Detroit automakers, after the ceremonial handshakes have already taken place, are now ready to begin the negotiations on the contracts set to expire this fall for the UAW union represented workers across the US. And Ford posted a historical record of $2.6 billion quarterly pretax profit next to GM’s own positive feat of $2.8 billion. Fiat Chrysler is also expected to showcase on Thursday its own significantly boosted profits for the North American unit during the April to June period. Just four years ago, during the last contract talks, Chrysler Group LLC, then a standalone company, was posting losses of $370 million in the second quarter as it was still repaying government loans offered during the 2009 bankruptcy reorganization. “I don’t see there being any conflict,” comments Bob Shanks, Ford’s chief financial officer. “We need to be profitable so we are generating cash to reinvest in these plants to support our workers.” The balancing feat – share the profits with manufacturing workers and still incur low costs to support the success – won’t be easy though.
“It goes without saying that the sacrifices of our membership for nearly a decade have been a driving factor behind the economic rebirth of Ford,” commented in turn Jimmy Settles, vice president for the UAW’s Ford department in a recent statement. According to Shanks, each one million dollars in profit contributes a dollar to a worker’s profit sharing checks. That means during the first half of the year, with pretax operating profit in North America at $3.85 billion, each worker could land a check of around $3,850.