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Ford CEO on his ‘epiphany’ after talking to factory workers in 2023

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Re: Ford CEO on his ‘epiphany’ after talking to factory workers in 2023

#101

Just tell them to go live in a van down by the River Rouge, Mr. Farley.

It's interesting that myself, and a non-insignificant number of other people, would take an option like this if it were legal. It would certainly make vacations much more affordable to be able to bring my home with me and not pay for an AirBNB/hotel + rental car/ubers! However, to someone for whom rent is an onerous expense, vans and box trucks are prohibitively expensive, especially when you consider 10 year TCO.

God I wish I could live by a river. Sadly they’re all toxic now it seems.

Re: Ford CEO on his ‘epiphany’ after talking to factory workers in 2023

#102

Earlier quoted context omitted.

I think the parent's point is more that there are so few of those workers that you need seniority for any job security in the first place. The 22-year-olds are the first people getting fired in a scheme like this, and there's not exactly a burgeoning demand for their replacement.

The UAW-Ford contract doesn't allow that, the 1-2 year employees would be fired before the 22 year old employees with 4 years of seniority. We're specifically talking about union jobs (UAW), so the company isn't generally targeting specific workers to fire. The union has a lot of control over which employees leave during layoffs, and often it's actually the workers with less seniority in the union who are let go. Gen…

Yep. It's a difficult needle to thread. Seniority IS important and there really needs to be a way to keep that knowledge. On the other hand, people retire, at some point... If you layoff the last batch of people (no matter how good they were at their job) and replace them with even newer people (in the case of my layoff with my "Team B" in the second most longest job I've had (8 years)). The incoming team at least had more training than our group did which was 2 weeks, they got 3 months. We were meant to be expendable but proved ourself during the pandemic with a massive influx ofwork-from-home installs, while people had quit and burned out from it all.

I still support Unions, even if in the US they're compromised, primarily (IMO) due to Taft-Hartley and the political restrictions placed upon them (mostly about cross-shop/cross-trade organizing, general strikes (sympathy strikes), etc...)

The best part was union leadership informing us the "good news" that there won't be 2 different pay-grades. And at least in the interim we did get a bump to "tier 1" for that time of negotiations while we were there before we were let go.

Re: Ford CEO on his ‘epiphany’ after talking to factory workers in 2023

#103

> Ford’s signature element in its new labor agreement was to get full wages to entry-level workers. But beyond that, he began looking at the labor shortage in trade work, starting with technicians.“Old-timers in our plants were saying, ‘It’s no longer a career, Mr. Farley. Working at Ford is no longer a career.’” He warned that millions of well-paid jobs are going unfilled because they require specialized skills. Put…

This is not unprecedented. Historically Henry Ford drew a lot of attention in 1914 when he doubled people's wages overnight. https://www.saturdayeveningpost.com/2014/01/ford-doubles-min...

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Re: Ford CEO on his ‘epiphany’ after talking to factory workers in 2023

#104

Earlier quoted context omitted.

Maybe China is the one that will find their labor compensation unsustainable?

In a world with a globalized economy it is a total abnormality that workers who are globally average are getting compensated far above the global average salary. Workers who have such demands can only exist because of very specific historical circumstances. Chinese workers are much closer to earning what you would expect the globally average worker to earn.

This sounds like an economically naïve take that ignores those realities of local labor markets, relative purchasing power, and all the other reasons that underpin the theory of specialization in the first place.

Re: Ford CEO on his ‘epiphany’ after talking to factory workers in 2023

#105

It is ridiculous to have American workers and Chinese workers doing essentially the same job, at the same quality, while their salaries differ enormously. American (and European) automotive companies will never be able to compete long term in any market which allows competition between Chinese and American (or European) cars. The labor of an auto worker is not worth that much and only by banning competition can Ameri…

Eh... "ridiculous" is a matter of perspective. If you're running a country and you want your people to be well-compensated and live meaningful lives, shuffling the hand in their favour is not violating some physical law. Countries restrain naked competition all the time to benefit their people. To me it seems much more ridiculous to expect Western citizens to accept a degradation in living standards for the abstract…

You don't get it. This is not a moral argument, it is about economic inevitability.

You can not be long term more prosperous than the rest of the world, while consuming more and producing less. The prosperity in the west is the result of historic circumstance, where mass production of basically every good allowed for an enormous export of goods, while the west was radically innovating in science and engineering and every other field. That is where the prosperity came from.

50 years ago the average American auto worker was genuinely 10x more effective than his Chinese counterpart. That is why he earned so much more. Right now that is no longer the case. American companies can not make money by selling US made cars in China, it is an insane economic proposition. In fact American companies can not really make money selling cars anywhere but America (maybe some in Europe), which means that there is less money that American auto workers can make by producing cars.

>To me it seems much more ridiculous to expect Western citizens to accept a degradation in living standards for the abstract notion of some universal economic efficiency. Though you can easily argue we're headed that way, it's mostly because of government capture by multinational corps.

It is not ridiculous. It is inevitable and begging the government to stop it, is like begging the government to make 1 plus 1 equal 3. There is no economic policy that makes China less of a competitor. Whatever anyone "deserves" is putting a moral spin on something which is not a moral question.

China is just as good as America at making cars, in fact it is much better, especially at lower price points. This significantly lower the economic value any American worker can provide and by that it lowers the prosperity he can gain.

>Countries restrain naked competition all the time to benefit their people.

But it is competition between countries.

Re: Ford CEO on his ‘epiphany’ after talking to factory workers in 2023

#106
post #104

Earlier quoted context omitted.

In a world with a globalized economy it is a total abnormality that workers who are globally average are getting compensated far above the global average salary. Workers who have such demands can only exist because of very specific historical circumstances. Chinese workers are much closer to earning what you would expect the globally average worker to earn.

This sounds like an economically naïve take that ignores those realities of local labor markets, relative purchasing power, and all the other reasons that underpin the theory of specialization in the first place.

Then give your theory why American workers deserve many times the wages of a Chinese worker, performing identical tasks to the same standards.

>local labor markets, relative purchasing power

Reverse causality.

>and all the other reasons that underpin the theory of specialization in the first place.

If you are specializing in something and someone else does everything you do better than you than the theory of specialization tells you that ...

Re: Ford CEO on his ‘epiphany’ after talking to factory workers in 2023

#107

Earlier quoted context omitted.

In fairness, homes in Detroit can be quite affordable. There are quite a few 2,000 sq. ft. homes listed for Good school districts are likely to be less affordable though, but cost of raising children is a whole other can of worms.

I think the parent's point is more that there are so few of those workers that you need seniority for any job security in the first place. The 22-year-olds are the first people getting fired in a scheme like this, and there's not exactly a burgeoning demand for their replacement.

My point was that we shouldn't pretend "over $40 an hour" for senior staff is generous. A young person would still be better served financially learning a trade than working on the line at Ford.

Re: Ford CEO on his ‘epiphany’ after talking to factory workers in 2023

#108

Earlier quoted context omitted.

Wasn't there some law suit from Chrysler, who tried to _stop_ him doing that? Presumably because it would give workers too much wage setting power in the market?

It was the Dodge brothers back when they were minority owners of Ford, and it was the case that poisoned us with “fiduciary duty to the shareholder”. https://en.m.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co .

what's wild is that it could be argued that this was in the shareholders' best interest as well, because it was in the best interest of the health of the company, but somehow that doesn't satisfy a "fiduciary duty"

When someone tells you "my hands are tied" it's always worth asking whether they made the rope

Re: Ford CEO on his ‘epiphany’ after talking to factory workers in 2023

#109

This article is wild. I love it when rich people tell you 1) they've been asleep for a decade and 2) their politics are insane. he was especially struck by stories from young factory employees. Many of them said they could not support themselves by working at Ford alone. “When I met with my entry factory workers, they were saying [they] had to have three jobs.” So, the thing people have been saying in public for 10 y…

Arsenal of democracy is something that Detroit specifically was called during WWII, so historically it isn't a wild phrase. Ford Motor Company itself built complete B-24 heavy bombers too.

Edit: also an FDR quote https://en.m.wikipedia.org/wiki/Arsenal_of_Democracy

Re: Ford CEO on his ‘epiphany’ after talking to factory workers in 2023

#110
post #104

Earlier quoted context omitted.

This sounds like an economically naïve take that ignores those realities of local labor markets, relative purchasing power, and all the other reasons that underpin the theory of specialization in the first place.

Then give your theory why American workers deserve many times the wages of a Chinese worker, performing identical tasks to the same standards. >local labor markets, relative purchasing power Reverse causality. >and all the other reasons that underpin the theory of specialization in the first place. If you are specializing in something and someone else does everything you do better than you than the theory of speciali…

I mean, you don’t "deserve" your wage you are just paid what someone is ok to pay you and that’s a factor of a lot of externalities.
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