A Master Class in Management Mis-Direction

I just watched a clip of Ford CEO Jim Farley in a CNBC interview five days ago on the UAW strike and its impact on makers and workers. It’s a master class in management mis-direction and shoddy interviewing on the part of the “press.”

https://www.youtube.com/watch?v=QaXrJjG-iT0 (see 2:55 into the clip)

THE QUESTION: Quickly put in some perspective… The offer that they have, that they’re demanding (there’s that word…), relative to where you are right now, how much damage would that do the bottom line if you were to say, sure, we’ll give you forty percent?

THE ANSWER: If we signed up for the UAW’s request, instead of making money and distributing $75,000 in profit sharing the last ten years (is that $75,000 PER YEAR or $7,500 each year?), we would have lost $15 billion dollars and gone bankrupt by now. The average pay would be nearly $300,000 dollars fully fringed for a 4-day work week. (Per employee?) Per union worker. Our average tenured teacher makes $66,000 a year. Our military, our firemen make mid fifty thousand. This is four, five, SIX times what they make. There’s no way we can be sustainable as a company…

Okay, STOP.

Do you see what he did?

The QUESTION was, from your CURRENT financial position looking FORWARD, what impact will a forty percent wage increase have on the company?

The ANSWER went back to the point of the original concessions after the 2008 meltdown and exrapolated TODAY’s wage plan atop Ford’s position over a DECADE ago. “THEN-Ford” absolutely couldn’t handle wage hikes of that degree, WHICH IS WHY THE UNION DIDN’T GET THEM. That’s why SENIOR workers have eaten a lower wage hike regime for 10+ years. That’s why ENTRY workers have been completely screwed by Ford and their senior union brethren by hiring into a wage structure that tops out at FIFTY PERCENT of the senior scale, putting them behind for their earning lifetime.

“NOW-Ford” is in a better financial position and GOING FORWARD, should be able to afford to correct the pay gap injected into wage scales years ago and correct for the 36 months of drastically higher inflation that shrunk those already-atrophied wages even more over the COVID meltdown and recovery.

Note the additional management jujitsu Farley subliminally snuck into the conversation about auto worker wages versus other historically underpaid workers – teachers, military, firemen… Given those vital functions are being so completely screwed on wages, it would be unfair to pay auto workers more… That’s the subliminal point he’s making. That’s the subliminal point nearly all executives make. There are so many classes of workers exploited for low wages, it would be “unfair” to correct them one group at a time cuz one group would get ahead of another. That’s not an argument for keeping the group currently negotiating down, that’s an argument for raising them all up. He even had the nerve to cite pay multiples between these other professions and auto workers. Do you really want to argue the pay inequity multiple angle, when CEOs are making 200x to 300x times average workers?

And his figure of $75,000 in profit sharing over the last ten years? That’s cumulative. Here are the numbers for the past few years:

2018 – $7500
2019 – $7600
2020 – $6600
2021 – $3625
2022 – $7377
2023 – $9176

For a worker with 2080 hours of compensation per year, these profit sharing checks at Ford are worth about $4.11/hour in a good year. (As an alternate data point, GM’s profit share paid in 2023 was $12,750.)

The “journalist” Phil Lebeau conducting this “interview” is really a glorified stenographer / cheerleader. This type of interview doesn’t help CNBC’s supposed audience of investors. It’s just a cable form factor PR outlet with as much integrity as PR Newswire.



It is exactly the same when TFG (#45) is interviewd. He is basically never called out on his blatant lies, the “journalists” just let him spew any half witted, imbecilic statement he wants. And if a lie is told often enough, and loudly enough, it’s taken as the truth by people who really want to believe it. So I don’t know if TFG learned from these CEO’s, or vice versa, but it’s the same attack plan.


Excellent post but then you assumed the wrong thing here. CNBC is not here to help anyone we know.


Oh, and I forgot an additional bit of mathematical slight of hand in the interview.

These executives keep making references to union workers making $300,000 per year. Whaaaaaa?

Any discussion dropping in those numbers is inherently dishonest. Let’s do some math…

The top union wage rate at Ford is $33/hour. $33/hour over a 40 hour week and 52 weeks a year only equates to $68,640. Ford is stating top tier workers could earn up to $98,000 under ITS proposal. CEO Farley is throwing out references about auto workers making up to $300,000. This is a bogus, rigged discussion in a hall of fun-house mirrors. Apples and oranges are being discussed.

When the rest of us have conversations about careers and SALARIES, we all mentally benchmark any salary figure against a typical 40 hour week. If I make $120,000 per year and you make $89,000, we both come away with a relatively accurate first impression that I am being compensated at a higher rate than you. If one of the job includes huge management bonuses or commissions, those factors get folded in as well. If one job is hourly and one is “management” and management might be expected to work far beyond 40 hours in exchange for those bonuses, that also gets referenced in the discussion.

When a automotive executive is negotiating a new contract atop an existing contract that caps out at $33/hour and references HOURLY workers making $300,000 per year, he’s not talking about a worker working 40 hours a week. He’s talking about a worker making $68,640 in regular wages and the balance ($231,360) from profit sharing and overtime. We know profit sharing typically comes in around $7500 per Ford’s own numbers. Profit sharing is solely based on company profits, not hours worked. That means that employee is earning $223,860 from overtime. That’s $223,860 / 33 / 2 = 3391 extra hours. That’s a total of 5471 hours or 105 hours/week… EVERY WEEK OF THE YEAR.

That’s a worst-case order of magnitude estimate but it illustrates the level of exploitation involved in making the dollar amounts executives throw out in these conversations. That’s a huge impact on the quality of life of the worker, both at the workplace and in their homelife, which at that point is nearly non-existant. That’s not an apples and apples comparison to make.

And that’s another sign of exploitation on the part of automakers. Even though they are paying overtime workers premiums, by working worker #1 twice as many hours, they are still avoiding a benefit stream for worker #2 which might exceed the overtime cost. But having someone work 70-80 hours to make up for the fact they are starting below $17.00/hour or have worked for 20 years and are only making $33/hour but need more to keep up is not equitable.



…like every other corporate owned media outlet. Always recite the management talking points.

The only difference is one of degree. Some are more blatant than others, in taking management’s side. but they all recite the excuses “it will make your car cost more”, “a strike hurts all the workers in related industries”.

Maria B probably calls the workers Commies for wanting any pay at all for their labor.



CEO’s in the US lie about money?

Could have fooled me.

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We are close to a total disappearance from normally available journalism of broadly knowledgable, doggedly digging, reasonably skeptical journalists. The results for a democratic republic, dependent on voters who can think, are horrific.

The USAian experiment may be degenerating into, not 1984 (dodging the 45 bullet), but Brave New World, full of peppy people suckled on faux-happiness pills and pseudo-spiritual psychos, weeded free of skeptics, mostly docilely unknowingly compliant to the obscure needs of the Alphas:

“You got rid of them. Yes, that’s just like you. Getting rid of everything unpleasant instead of learning to put up with it. Whether ’tis nobler in the mind to suffer the slings and arrows of outrageous fortune, or to take arms against a sea of troubles and by opposing end them… But you don’t do either. Neither suffer nor oppose. You just abolish the slings and arrows. It’s too easy.”

What Huxley left out was how the Alphas evolved. My guess is that they would evolve from the accountant/lawyers who manage great fortunes, familial or institutional, and are already now on their way to becoming the Real AI structures dominating humanity. They will (do) make damn certain that Ford and GM need give no real answers, and that the UAW and allies are only heard as weird echoes of depression times…

david fb


I think you may have missed a very critical and important part of the fringe benefits. payments to union management and the PENSION payments. The fully burdened rate for EVERY HOUR WORKED is quite a bit higher than the max, the cap or the overtime number.

kindly consider that pension and union fee payments can exceed $15/hr and significantly plus up any gross compensation number.

Also, having many union family members in my immediate and extended family, I can’t recall any conversations that only include the standard 40 hour per week number. They always talk “TAKE HOME”. That number would necessarily exclude benefits such as health insurance, taxes, pension and union dues, but WOULD include overtime.

That Overtime is an essential part of the calculus for jobs taken and maintained for almost every one of them. For the other two, they always look at per diem payments which can exceed 60% of base pay+overtime. (but that is another conversation as that family member workes on Operators unions on infrastructure projects which do not fit the UAW model at all.

Keeping the facts straight keeps the narrative honest, but it doesn’t fit the villains and heroes model as well.

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I think you may have missed a very critical and important part of the fringe benefits. payments to union management and the PENSION payments. The fully burdened rate for EVERY HOUR WORKED is quite a bit higher than the max, the cap or the overtime number.

They’re hard to nail down scientifically but it’s worth a back of the envelope analysis.

The pension aspect is difficult to quantify since at least for Ford and GM, new employees were frozen out of traditional pension plans as of late 2007. This WaPo article

states a very high portion (70% at GM, 87% at Stellantis) of workers are at the top of their wage scale yet the UAW reports that overall, 70 percent of its 150,000 members were hired after 2007, meaning they are capped out on the newer, LOWER wage scale with zero pension contributions. Automakers of course still have to contribute funds to the pension plan for the 30% of union workers still eligible in the pension plan. How much might those 401k and pension contributions cost?

For newer union workers only offered a 401k, a worst-case cost can be estimated. Contributions under the current contract aren’t “matching” per se, but a contribution of 6.4% of straight-time wages for all hours worked. They also pay $1/hour up to 40 hours/week (this would be uncapped in the proposed deal from Ford). If you are making the max of $33/hour and working 50 hours/week, the firm contributes (50 x $33 x 6.4%) + ($1 x 40) or $105.60 + $40 or $145.60 each week or $7571 per year per worker.

If all 70% of 150,000 union members hired since 2007 are contributing anything to their 401k, this would imply company contributions of $145.60 x 150,000 x 70% x 52 or $795 million dollar per year across all firms. Back to an hourly view, such 401k contributions are at best $33 x 6.4% or $2.11 for every hour plus $1 for regular hours only – add 'em together for worst case as $3.11 / hour. I would expect pension contributions for the few workers left still eligible for the older pension would be slightly higher but in the same ballpark.

If you assume the average employee’s healthcare costs are roughly $9000 per individual or $18,000 per family with dependents (***), that $18,000 spread across 2080 straight time work hours is $8.65/hour.

*** In fact, Ford’s press release touting its proposal cites the value of healthcare coverage as $17,500 so this logic is pretty close. They estimate the cost of other benefits to be $20,500 or another $9.86 / hour.

A google search of UAW dues reflects that currently, full time workers pay 2 hours per month (e.g. if you make the $33/hour limit, you pay $66.00 each month regardless of how much overtime you earn) and if you work part time or per diem, you pay 1.15% percent of straight time wages (meaning if you work 20 hours/week on an off-shift that pays a night differential, you only pay 1.15% of the non-differential portion of your wages each month). These were previously 2.5 hours or 1.44% until changed in 2018 after union leadership had used the higher rates to beef up the union’s strike defense fund above $850 million.

Added all together,

  • $33.00 for takehome wage
  • $ 8.65 / hour for healthcare
  • $ 9.86 / hour for other benefits
    $51.51 / hour loaded rate (56% above the nominal $33/hour rate)

Note that the $8.65 and $9.86 calculated here are close to your $15 estimate…

I presume union dues are deducted out of the wage rate, not padded into it. I would also presume the $9.86 in “other benefits” above as Ford describes them would include the explicit $3.11 calculated above for 401k contribution or equivalent pension contribution for the higher tenure workers. The other benefits likely lumped into that $9.86 allocation would be short-term disability, long-term disability, term life insurance or ADD (accidental death / dismemberment) insurance.

From my experience in seeing budget and headcount planning gymastics in Corporate America for a non-union shop with “craft” workers and a lot of middle management workers, these per capita costs don’t seem out of line with other industries or large work forces.



First, thanks for walking through it.

Second, management usually speaks about burdened rates. This includes all SS, workers comp, and other company born costs which the individual never sees. I’m quite sure he’s referencing this number.

It’s all fuzzy math because the worker never sees this, has no control over it and yet, has this number hung on their head. I know of no company that considers costs from the employee point of view. It would be negligent and a serious business risk.

Having said that, I still can’t close the gap to $300K unless the ramp starts in the past or there are some other conditional items (capital improvements for amenities like workout facilities, break rooms, covered parking etc.)

Including those last 'benefits" would be a way to pile on, for sure.


Not really, because that “cost” would need to be amortized over the expected lifetime of the investment. So an annual per-employee cost would be far lower.

I’m with you. I said it because I was trying to think of all the ways and all the stories I’ve heard over the years about “all-in” employee “benefits”.

At my prior company, they had a plan for a while to build a public workout center outside the gates. It was touted as a $1500 annual fringe benefit to the employee. You guessed it, the company was taking credit for the full fitness club fees payable to others - retail.

Actual costs internally were just south of $150,000 all in. This was to be built upon an otherwise vacant part of the parking lot. Amortized over the 30 year building life, it would be just over $4/employee, plus overhead to run it.

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Having said that, I still can’t close the gap to $300K unless the ramp starts in the past or there are some other conditional items (capital improvements for amenities like workout facilities, break rooms, covered parking etc.)

Yup. That was the point of my original reaction when I heard him throw out “$300,000” then use that to sorta shame the UAW workers as if they were asking for 5-6x times the pay of other noble working people.

I went back and created a simple Excel model to bucketize all of the compensation components for holidays, vacation, regular hours, 1.5 overtime hours, 2.0 overtime hours, then map them through wage rates and 401k contributions and confirmed someone would need to have 4900 compensation hours per year at $33/hour to get $298,984. Here’s roughly what the numbers look like:

Holidays – 15 days per year – 120 hours
Vacation - 10 days per year – 80 hours
Regular work hours – 1880 hours (52 weeks less 5 weeks of holidays/vacation)
1.5 overtime hours – 8 / week – 376 hours
2.0 overtime hours – 52 / week – 2444 hours
Total work/benefit hours – 4900 hours

Regular / Holiday / PTO Wages – $68,640
1.5 overtime wages – $18,612
2.0 overtime wages – $161,304
401k contribution (6.4%) – $10,384
401k contribution (hours) – $2080 (capped to 40 hours/week)
Healthcare insurance – $17,500
Life / Disability / ADD insurance – $20,500

Total Wages / Benefits Compensation = $298,984

This means the average weekly hours worked when the worker isn’t on vacation or off for a holiday is (1880 + 376 + 2444)/47 weeks = 100 hours. There’s only 168 hours in a week so anyone working 100 hours a week only has 68 hours out of work to sleep, commute to and from work and figure out who those strangers are who keep appearing in their house when they come home exhausted. 9.7 hours out of work per day.

Growing up, I had a sort-of friend who’s dad was a tool and die maker at Anheuser-Busch. As a younger kid, all I heard was AB this, AB that… By the time I got to about 10th grade, young adult me had processed the fact that this friend’s dad was probably a) a workaholic and b) was probably making a ton of money because he was on call probably 24x7 to help fix stuff if anything in the local brewery failed. Turns out that was true. But he died of a heart attack at roughly age 58.

If you can find someone willing to do that to themselves I guess it’s legal. It’s not economically just and I certaintly don’t want this practice be practiced in industries associated with transportation, utilities, security or public infrastructure related. It certainly isn’t good from a business continuity standpoint to be that dependent on a smaller than needed pool of people you are working to death.



He is mixing the average wage of $300k with the notion of it applying only to union workers. He is including similar pay raises for management. Why won’t he get 40% more? You crazy?

The man is a genius? This is why he is running a car company? His honesty is refreshing, sarcasm.

Great analysis, WTH! The only thing I might add - which would easily get you over that $300k figure - is payroll taxes. You could simplify and only consider FICA taxes (social security and medicare). Federal and state unemployment taxes are probably small enough to round them down to zero. FICA on your calculated wages (using very rough math) is going to be something north of $11k per year.

In the interview, Farley talked about a “fully burdened” rate. That would certainly include employer side costs like payroll taxes and worker’s comp insurance.


It’s heading off the topic of this thread, but the failure of the 4th estate in the US might be the single most pervasive issue of the century. The internet has given anyone the ability to look like a journalist. And it has also destroyed the newspaper business - the backbone of the 4th estate since before the founding of the country.

If we don’t find a way to turn this around, I suspect historians 50 to 100 years from now will determine that the failure of journalism was the single largest contributor to the failure of democracies around the world.



I have been hearing the 4th estate confused with the 5th column for years. A recent “thought leader” was not the first to call the press the enemy, in the US.

So, the corporate media plays it safe: see which way their political weather vane is pointing, then read the appropriate press release from the crowd that controls the sponsorship money. Local news at noon today, was whining, again, about all the thousands of other people being laid off, because of the auto workers being on strike. Of course, the strike isn’t the fault of the “JCs”. It’s entirely the fault of the workers who walk the picket lines.



Great analysis but I’m not following the arithmetic regarding the overtime numbers.
1.5 hr * 5 days = 8?
2.0 hr * 5 days = 52?
What am I missing?

In a way, the press IS the enemy of politicians and corporate big-wigs and other similar “thought leaders”. A well-functioning press looks into the dark recesses these folks would prefer that We The People ignore - or don’t find out about.

Corporate media can churn out tons of stuff that looks like traditional journalism, but contains none of the meat of that journalism. That corporate media is part of the problem, not part of the solution. They are the corporations that old-time journalists would look into and expose. But no one working for those corporate media business is going to look into their own company. And looking into competitors is hard because of the nature of competition.

I wish I could see a solution, but I simply don’t. I can only hope someone younger and more energetic can solve the problems those of us with more life experience can only identify.



It’s not 1.5 hours (or 2.0 hours). That’s time and a half over time and double overtime.

For time and a half, there are 8 hours a week times 47 weeks worked or 376 hours per year.
Double time - 52 hours a week times 47 weeks or 2444 hours a year.

–Peter (who is not WTH, but who also understood the math)