Craig Trudell and Ma Jie
Stepping up criticism of Japan’s auto industry, a Ford executive said the U.S. could miss out on more jobs as a weaker yen trading in foreign currency exchange lets carmakers led by Toyota avoid shrinking in their home nation.
Automakers including Ford are production-constrained in North America as U.S. sales rise, said Joe Hinrichs, Ford’s president of operations in the region. At the same time, a weak yen is supporting exports from Japan, which the analyst group IHS Automotive estimates has 2 million vehicles of excess capacity.
“The industry is growing and capacities are a little tight in North America,” Hinrichs said. “Where is the extra available capacity going to come from? If Japan’s one of those places, in lieu of more manufacturing in the U.S., the American worker does lose in that proposition.”
The comments build on remarks by Chief Executive Officer Alan Mulally, who in June said Japan was manipulating its currency, and reflect a threat that Ford sees to continuing its recent growth in the U.S.
While the automaker has been the biggest gainer of market share in the industry this year, Toyota outsold Ford in July for its first monthly win since March 2010.
U.S. automakers led by Ford have criticized Japan as the yen has declined 12 percent against the dollar this year. U.S. lawmakers have since pressed for provisions that would prevent currency manipulation to be a part of a trade pact with Pacific region nations including Japan.
Ford has said it plans to add almost 3,500 hourly workers in the U.S. this year as it increases capacity to build 200,000 more vehicles annually in North America to meet increasing demand for F-Series pickups and Fusion sedans.
The new employees will start at an entry-level wage first agreed to by the United Auto Workers union in 2007, which brought their pay closer to what workers make at Japanese automakers’ U.S. factories. The arrangement was extended by Ford and the UAW in a 2011 contract, which called for new workers to start at $15.78 an hour, compared with about $28 for senior employees. The entry wage rises to $19.28 by 2015.
New data recently released by the Detroit-based union’s Ford department shows the extent of Ford’s hiring in recent years. Ford had 8,819 entry-level employees as of earlier this month, according to the first report released from a new section of the UAW department’s website.
Ford is permitted to hire another 4,058 employees at the entry level before it has to begin transitioning workers to senior worker wages, according to the report.
The entry-level wage agreement was among the actions taken as the U.S. auto industry restructured, culminating in the 2009 bankruptcies of the predecessors of General Motors Co. and Chrysler Group LLC.
Ford avoided bankruptcy by borrowing $23.4 billion in late 2006 and closing 16 plants from late 2005 through 2009 to bring its production in line with demand.
Japan’s auto industry has yet to take similar steps to reduce its output, Hinrichs said. While the nation’s automakers have the capacity to build 11 million vehicles this year, they probably will produce about 9 million, said Masatoshi Nishimoto, a Tokyo-based analyst at IHS Automotive.
“North America went through its restructuring,” Hinrichs said. “You look at Japan, and for lots of reasons, culturally and otherwise, the industry hasn’t restructured the excess capacity.”