Ford CEO: Up to 20% of factory workers are out on some days

By Peter Valdes-Dapena, CNN Business

Face masks are required again in major US auto factories and, according to Ford CEO Jim Farley, that has some workers deciding not to show up for work. In some factories, absentee rates can exceed 20%, he said in an interview with CNN Business.

“When a fifth of your workforce isn’t coming in, in a manufacturing operation where everyone has their job and you don’t know who’s going to be missing every day, man, it’s really challenging,” Farley said.

General Motors, Ford and Stellantis, the company that makes Dodge, Jeep and Chrysler vehicles, agreed with the United Auto Workers union in early August to begin requiring masks in their factories again. That mandate has contributed to the absentee problem, Farley said.

“The economics of staying out of work are getting more attractive during the summer,” he said. “It’s people that are apprehensive. It’s people who say, ‘I don’t want to wear a mask this week.’ It’s a variety of things.”

Spokespeople for GM, Stellantis and Toyota, which was not party to the UAW agreement but also now requires masks in its US facilities, would not share information about absentee rates in their factories.

Ford has been using temporary workers to fill in on the line when regular line workers don’t come in, Ford spokeswoman Kelli Felker said later.

GM, Ford and Stellantis maintain a pool of temporary workers who are ready to fill in at positions left vacant by regular employees.

Kristin Dziczek, an industry analyst with Center for Automotive Research, said she’s not surprised that absenteeism can sometimes reach 20% given the combination of the surging coronavirus cases, summer vacation time and other reasons people want to take time off. It hasn’t become enough of a problem to greatly impact production, she said, which is backed up anyway by a chip shortage and other various parts supply issues. It does present additional challenges, though.

“They’re having some struggles getting enough temporary workers and getting enough people in general.” she said.

Ford isn’t requiring vaccines in its factories, but vaccines are required for many executives, especially those who travel internationally, and their support staff, Farley said. Vaccine requirements aren’t a part of Ford’s contract with the United Auto Workers but Farley called the union “as diligent as anyone” in its concern about the virus.

“Our position is that we strongly encourage all members to be vaccinated and understand there are exceptions related to health and religious issues,” UAW spokesman Brian Rothenberg said in an email.

Separate from employee absenteeism, Ford’s factory production has been particularly effected by the global computer chip shortage, Farley said. Automakers across the industry have had trouble making cars and trucks without the computer chips that have become so crucial.

“I’d say it’s getting better for us in the third quarter, but we were hit the hardest,” Farley said. “Ford lost over 50% of our production second quarter, most other brands lost 20%.”

Jeff Schuster, head of global vehicle forecasts for LMC Automotive, said Farley’s estimates were roughly correct when comparing actual production in the second quarter of 2021 with what had been expected. Most automakers’ production was down by somewhat more than 20%, though, compared to what had been expected.

Ford’s sales last July, the first month of the third quarter, were down almost a third compared to July 2020.

The automaker is taking steps to prevent problems like this from occurring again, Farley said, by working with supplier companies — and even suppliers to those suppliers — to set up early warning systems. This way, when Ford’s suppliers are facing issues with their own supplier companies, Ford can take action sooner to prevent major problems.

The challenge with that idea, said Dziczek, will be getting the various supplier companies to agree to such openness about their challenges.

“Nobody wants anybody in their business,” she said.

With worker shortages combining with shortages of things like computer chips, steel and even shipping containers to carry parts to the factory, Dziczek said, a supply chain that is challenging to manage in normal times has become a nightmare.

“It’s a goddamn miracle we can make a car at all,” she said.

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