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…
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.