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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

#71

Earlier quoted context omitted.

I don't disagree, but I do think the modern culture of company hopping is contributing to this. As a leader entrusted to make good decisions for the company, you must consider this reality. At a previous company we hired a lot of junior engineers with the idea that our relatively high pay and reasonably good work would help us build a strong generation of seniors a few years down the road. What we mostly found was th…

What's the structural solution to this? Offer golden handcuffs to stay for x years? - "We'll train you, and if you stay the full 8 years you get a $500,000 bonus"? - "Here's a $200,000 signing bonus, which you have to pay back if you leave before 8 years" I'd be hesitant to rely on these as a candidate, because I'd have to assume I'd get fired at year 6-7 or something so that the company could save money.

I think golden handcuffs are a bandaid, but it can stop the bleeding. It didn't work on me (I was willing to walk away from huge ISO incentives long before vesting because I (probably foolishly) valued job happiness more than money), but it does work on a lot of people.

I don't know a long-term structural solution, for exactly the reason you mention:

> I'd be hesitant to rely on these as a candidate, because I'd have to assume I'd get fired at year 6-7 or something so that the company could save money.

Trust is at an all-time low right now, and for good reason. It very well might take years to turn the ship around. I think it will have to start with the big companies as a small company trying to do this will only put themselves at a disadvantage, but any exec at a big company proposing this would probably be dismissed as they heavily favor short-term over the long-term (by their actions, not necessarily words, but IMHO actions are all that really matters). Basically it's a Tragedy of the Commons problem.

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

#72

Earlier quoted context omitted.

from the op: > ridiculously stupid HR practices... a structure in which the only way to get a raise was to leave the company, and that was also often the best way to get promoted too Until that culture changes, of course you're gonna assume you get fired or issued a surprise RTO order at year 7.5. When the social contract becomes penny-pinching every opportunity, of course the employees are gonna start playing that g…

Yes, but where does the culture change begin? My conundrum in trying to solve it is: - Companies that pay in the top 1% of compensation already don't have a retention problem. - Only 1% of companies can pay the top 1% of compensation. - The other 99% have issues with retention. - Companies only have $X to allocate for 10 years of employment compensation. - Any 99% company that structures $X of compensation to provide…

A meta-comment, but I wanted to let you know that I've really enjoyed our comments today. I appreciate your ability to analyze and articulate, and most importantly making me think :-)

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

#73

Earlier quoted context omitted.

99% of the time, I agree with you. But hypothetically, what would you call a situation where 20 companies would all be willing to pay salaries of $1 million/year to fill 10,000 open positions that required 5 years of training, but there are only 5,000 people who have that training? Would that be a "labor shortage"? It seems your solution works for companies willing to pay more to poach from other companies, but might…

> At some point, the salaries are indeed "high enough" but the skills still just aren't available to hire. But the incentive to develop the skills should sort this out, no?

Sure, in an economy with an inexhaustible supply of new workers seeking new skills and employment. Do we think that accurately describes the United States in late 2025?

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

#74
post #66

Earlier quoted context omitted.

In the long term, yes definitely, and we saw that work first-hand in software development as bootcamps and comp-sci grads started cranking people out. However, the ramp-up time means that during those 5 years that it takes for more people to get qualified, this corrective affect won't help. Also in the real world the wages are sticky enough that they take time to adjust, and then it takes time for people to realize t…

> In the long term, yes definitely So, in the automotive industry they've been paying too little to attract people. Meaning they now have a shortage. That's still on them. Sounds to me like they made some really nice profits for a couple of years and are now feeling the pain of that. Funny that you mention AI where people are saying there's no need for Juniors anymore. Exactly the same, you'll make some money now and…

Yeah, you're not wrong. But collectively saying "the automotive industry" is a little too simplistic, since in theory they are competing and can't be colluding, so "the automotive industry" paying too little shouldn't be possible. In practice though, we all know it isn't that simple, so your point has merit.

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

#75

Earlier quoted context omitted.

I don't disagree, but I do think the modern culture of company hopping is contributing to this. As a leader entrusted to make good decisions for the company, you must consider this reality. At a previous company we hired a lot of junior engineers with the idea that our relatively high pay and reasonably good work would help us build a strong generation of seniors a few years down the road. What we mostly found was th…

> modern culture of company hopping is contributing to this Zero people are doing this for the fun of it. This is entirely driven by incentives, not "culture". Or, rather, not by "culture" of the people doing the hopping—C-suite and MBA culture, yes, very much so, this is one of many bad outcomes from having companies run entirely by "professional managers" and finance dudes rather than people who were, at the start…

I don't disagree, but I think it's the incentives that led to the culture. Changing the incentives will have a downstream affect on the culture, but it's not immediate. It takes a bit of time for the shit to roll down hill.

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

#76

Earlier quoted context omitted.

Pretty crazy improvement, seems like he's putting his money where his mouth is

Once those UAW workers achieve seniority they might be able to afford a very small house.

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.

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

#77

Earlier quoted context omitted.

Unfortunately sedans and hatches are just about completely out for the domestic automakers- they sold poorly and were discontinued. The reasons behind poor sales are surely multi-faceted, but, for Ford in particular, they didn't help matters with quality issues like the "Powershift" dual-clutch automatic, which was flawed from the beginning and left a lot of Focus and Fiesta owners (both now discontinued in the US) w…

The root cause is CAFE regulations and the penalty for small-footprint vehicles. You get more profit if you don't have to make higher efficiency cars rather than cheaper trucks. You get more profit if you make larger trucks rather than smaller. The optimal solution is to make cars undesirable with poor quality or stop building them altogether by pretending they're trucks (PT Cruiser, all XUVs) and make smaller trucks…

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

#80
post #7

Seems like a good time to mention my old stand-by: There is no such thing as a labor shortage. There may very well be a shortage of qualified people willing to work under the conditions and for the compensation a company would like to provide. When stated that way you can see that there are several levers to pull, the most obvious being compensation.

99% of the time, I agree with you. But hypothetically, what would you call a situation where 20 companies would all be willing to pay salaries of $1 million/year to fill 10,000 open positions that required 5 years of training, but there are only 5,000 people who have that training? Would that be a "labor shortage"? It seems your solution works for companies willing to pay more to poach from other companies, but might…

You could call that excess capital as easily as a labour shortage. Or a shortage of training pipelines in an irresponsible industry.

When GM realized they needed more mechanical engineers than existed, they built a whole university. These days, capital just whines. If you can spend $100 BILLION on data centers, you have the budget to stand up a proper school.

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