LexFinally

Agree. Returning this thread to the topic of cars, it's always been interesting to me that Hyundais and Kias have historically been sold on the basis of price/value (price years ago, value today) even though their workers don't come cheap. I think, despite the savvy marketing move of the 100k warranty, that savings still comes out of corner cutting on long-term quality: keyless go systems without basic safeguards, plastics that scratch if you look at them, etc. When you look at the Consumer Reports survey results on specific models that go out to 7 years of age (not just surveys of initial quality), you see a pattern of cars that start to throw a cog at age 5-7. You don't see that with Toyotas.

mmarshall

Fortunately, the strike is not disrupting the big Detroit Auto Show, which is still in progress as we speak.

https://naias.com/

mmarshall

The thread is actually more about the strike and its effects.

bitkahuna

iTrader: (20)

well looks like ford is building the bronco in china now so that should help them.

https://www.carscoops.com/2023/09/ch...271-hp-engine/

mmarshall

That won't replace the lost production from the Wayne, MI plant being struck. Those Chinese Broncos aren't built to American specs...they are for the Chinese market.

LeX2K

So the rough math is Ford makes $10 billion/year in profit. They have something like $70 billion in long term debt. 40% increase in hourly wage will basically kill Ford.

Big Andy

Actually, Chinese car workers earn more than Mexican employees of US companies building US cars:

https://www.autoexpress.co.uk/car-ne...7.50%20a%20day.

geko29

Please explain how affordability of a $21M or so CEO salary indicates affordability of pension programs with an annual cost that starts with the letter B.

It's actually closer to 60% effective, since the ask is a 46% increase AND a 20% reduction in hours. If all of the UAWs demands were met (including restoration of pensions without eliminating 401k match--talk about double dipping!), Ford's total labor cost will be $150/hr, vs. $64/hr today. At the current number of 57,000 union employees, that would be an additional labor cost of $5B/year, or half of the remaining profit. That certainly would make servicing a $70B debt challenging....

LH1

If I remember correctly, isn't Ford projecting a $4.5B loss due to their move into the EV space?

If Ford and the UAW come to some compromise won't that number be much higher?

LeX2K

You're right I forgot about the reduced hours demand (absurd).
Maybe I'm too cynical but to me is this about the UAW realizing they are becoming obsolete as the industry moved to EVs so they are trying to squeeze the drying up lemon while they can.

mmarshall

It doesn't all come out of executive-salaries. For one thing, as workers retire, more and more technology and auto action is replacing their assembly-line jobs. Much of the money saved by automation could be used for pensions.

For one thing, just look at history. When they did pay pensions, decades ago, the Big Three (particularly GM) controlled most of the domestic vehicle market. Then they got cheap and started cutting wages, eliminating pensions and exporting job overseas. The more they did so, the more of the domestic market they lost, and the worse things became for them....until they went bankrupt. It was a classic case of corporate greed catching up with them.

The Big Three also asked UAW members to make some BIG concessions in 2008/2009, for the bankruptcy/reorganizations, which they did. But since then, they have not been willing to do very much for the workers in return, and simply farmed more jobs out overseas.

And we wonder why we're seeing strikes.

Mike728

Do you think there may be a link between replacing jobs with automation and the cost of the average worker?

As almost every other business that once had a pension has figured out, aside from the government, pensions are not sustainable. For government pensions, all you have to do is increase taxes to make the payments. A publicly traded company doesn't have that luxury.

mmarshall

Simple math. All else equal, the fewer employees a corporation has ,and the more jobs automation takes away, the more they can afford to give each remaining employee.


First, you have to remember that although companies can't increase taxes, they can, and do, increase prices.....we have seen that in spades the last few years in many industries, although, with vehicles, more at the dealer level than the manufacturer level. Second, like I said earlier, look at history......The Big Three were at their best, and making their best profits (1950s/60s) when they WERE paying high wages and good pensions, and when the UAW was at its strongest. It was an unmistakable pattern......the cheaper and more Scrooge-Like the companies got over time, and the more they took away from their employees, and the more jobs they farmed out overseas, the more market-share they lost, and the worse things got for them. Like it or not, Karma caught up with them.

LeX2K

So there is nothing else they should be putting that money into? Like investing in new tech and R&D in general?
What caught up with them is making crap products. Toyota showed up with far better quality and reliability the rest is history.

mmarshall

Many of the current problems with new vehicles are due to having too much new-tech, not a lack of it. The money spent on unnecessary tech features could go to employees instead.

I'm not saying that all of the current tech-features in vehicles are unnecessary, but it has become excessive, and we have clearly gone from producing driving-machines to producing Spock and Captain-Kirk machines.


Yes, that's part of it, but they didn't start to make crap-products until after they started to screw the employees. The products got even worse (particularly at Chrysler) when disgruntled employees, in reprisal, started to deliberately screw up the assembly lines. Customers and technicians were finding coke cans, drug-use products, cigarette butts, nuts/bolts and all kind of crap dumped down inside of door-panels which would cause rattles, things not welded, screws not tightened, etc.....


Toyota also treated their workers a lot better...they were considered more or less part of the corporate family, not just hired servants.