Ford, UAW, formally begin labor talks; jobs to Mexico at issue

By Bernie Woodall

DETROIT (Reuters) - Leaders of the United Auto Workers union and Ford Motor Co (F.N) started talks on a new labor contract on Thursday, with the specter of jobs fleeing to Mexico hanging over the proceedings.

Earlier this month, Ford announced that it would move production of its Focus and C-Max small cars from a plant near Detroit in 2018. Ford has not confirmed UAW officials' comments that the production will move to Mexico.

UAW President Dennis Williams said he and his negotiators will press Ford to keep the Michigan Assembly Plant open. Ford's manufacturing chief, John Fleming, said there are no plans to shut any of the company's U.S. plants.

Last Friday, Williams met with President Barack Obama and Labor Secretary Tom Perez at the White House and discussed environmental and safety standards for Mexican manufacturing. Williams said, "I have a plan" to work to improve conditions for Mexico's auto workers that he will address after contract talks with the three Detroit automakers.

He did not detail that plan and said he does not know how far the White House will go to help the UAW narrow the gap of manufacturing standards in the two countries.

In the next six years, Mexico's auto output will rise to more than a quarter of North American production, largely due to lower costs, including worker pay. {ID:nL2N0WR1KX]

The rise of Mexico as an auto assembly hub is just one factor weighing on the UAW as it launches contract talks with Ford, General Motors Co (GM.N) and Fiat Chrysler Automobiles (FCHA.MI) (FCAU.N). All three current contracts expire Sept. 14.

Ford CEO Mark Fields said the company wants a "fair and competitive labor agreement for both sides," sentiments that were echoed by Williams and the union's chief Ford negotiator, Jimmy Settles.

Ford's executive chairman, Bill Ford, was also on hand for Thursday's ceremony at a Detroit high school.

Ford and Fields are under pressure to keep labor costs competitive with the lower worker pay for Japanese, German and Korean automakers with U.S. plants. Williams is under pressure from UAW members to gain the first raise for veteran workers in nearly a decade and to narrow the gap in pay of those veterans, who make about $28 per hour, and newly hired workers who make between $16 and $19.

(Reporting by Bernie Woodall; Editing by Dan Grebler)