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When Henry Ford built cars, he knew that the people making his cars were also buying his cars. That mantra was thrown out in the 80s. The new mantra was "make s

When Henry Ford built cars, he knew that the people making his cars were also buying his cars. That mantra was thrown out in the 80s. The new mantra was "make sure the people making the stuff are poorer than the people buying the stuff, and you [shareholders and executives] can pocket the extra profit margin." The flaw in this theory is obvious: Eventually you run out of poor people willing to build things they themselves cannot afford to buy, and since the buyers of your stuff no longer have jobs, they're no longer buyers either. And that's where we are today. It sucks, but a lot of wealthy people made a lot of money on the float while it lasted.

fordworker234 7y ago
This is ridiculous. Ford pays very high salaries compared to the rest of Detroit and most of America. The interns are paid $23 per hour for instance. https://www.glassdoor.com/Salary/Ford-Motor-Company-Detroit-Salaries-EI_IE263.0,18_IL.19,26_IM236.htm https://www.glassdoor.com/Salary/Ford-Motor-Company-Detroit-...
- dreamcompiler 7y ago
  I should have made clear I was describing how all (or at least most) American industry threw out Henry Ford's mantra. Ford Inc might still be living Henry's values.
- ModsCtrlideas 7y ago
  Ford offered me 83k as a 5 year engineer, 2 years contract. GM offered me 110k. And after 8 years, Nissan at 120k. Ford pays the worst for engineering
devoply 7y ago
Just goes to show that the poor need their own power structure, Trump or Fascism (not saying Trump is fascism, just saying Fascism is another option which appealed to poor people in WWII) is not a replacement for that.
manfredo 7y ago
Were that the case, we'd see a prevalence of people unable to afford cars. This is not the case. The cost of an automobile is an even smaller fraction of an average person's disposable income than it was during Henry Ford's day. And this isn't considering the fact that a modern car is far safer, more comfortable, more fuel efficient, and just broadly way better than a model T. American workers are too highly paid to make many manufacturing jobs viable in the US. If GM et al. were to pay American workers more they would either not be making enough money to stay afloat, or the cost of their cars would rise considerably (and likely lose sales and not be profitable anyway).
- chillwaves 7y ago
  Financing is a thing.
- ejanus 7y ago
  But Fiat doubled headcount, how was that possible if your argument that labour cost is the issue ? Let's not follow garden economics, greedy and laziness may be the root. BTW other auto companies are expanding except GM. The real storm would be when next time they need bailout , would they be bailed out as US company?
  - adventured 7y ago
    > But Fiat doubled headcount ... BTW other auto companies are expanding except GM GM's business is shrinking while most automakers have expanded in the last five years. It makes perfect sense that GM would contract their employee count as sales decline backwards by nearly two decades. GM sales 2014: $155b | 2018: $147b Their sales in 2005 were $193b by comparison. Automotive sales were $158b that same year. Fiat sales 2014: €96b | 2018: €110b Volkswagen sales 2014: €202b | 2018: €235b Toyota sales 2015: ¥27.2t | ¥30.2t Ford sales 2014: $144b | 2018: $160b Honda sales 2015: ¥13.3t | 2019: ¥15.9t
- cityzen 7y ago
  I think the only American workers that are paid too highly for manufacturing jobs to thrive in the US are folks like this: As Chairman and Chief Executive Officer at GENERAL MOTORS CO, Mary T. Barra made $21,870,450 in total compensation. Of this total $2,100,000 was received as a salary, $4,452,000 was received as a bonus, $3,425,006 was received in stock options, $11,081,760 was awarded as stock and $811,684 came from other types of compensation. This information is according to proxy statements filed for the 2018 fiscal year.
bumby 7y ago
This is actually a myth (or clever PR) about Ford raising the wage to enable his employees to buy the product they were creating. There's been numerous reports that show the economics of that don't really make sense. The wage raise was actually to prevent turnover to improve productivity; it wasn't uncommon to have people walk off the assembly line mid-shift, shutting down production. https://www.forbes.com/sites/timworstall/2012/03/04/the-story-of-henry-fords-5-a-day-wages-its-not-what-you-think/#a204637766d2 https://www.forbes.com/sites/timworstall/2012/03/04/the-stor...
ousta 7y ago
he actually lost this battle while he was alive: https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.

fordworker234 7y ago

This is ridiculous. Ford pays very high salaries compared to the rest of Detroit and most of America. The interns are paid $23 per hour for instance. https://www.glassdoor.com/Salary/Ford-Motor-Company-Detroit-Salaries-EI_IE263.0,18_IL.19,26_IM236.htm https://www.glassdoor.com/Salary/Ford-Motor-Company-Detroit-...

dreamcompiler 7y ago
I should have made clear I was describing how all (or at least most) American industry threw out Henry Ford's mantra. Ford Inc might still be living Henry's values.
ModsCtrlideas 7y ago
Ford offered me 83k as a 5 year engineer, 2 years contract. GM offered me 110k. And after 8 years, Nissan at 120k. Ford pays the worst for engineering

devoply 7y ago

Just goes to show that the poor need their own power structure, Trump or Fascism (not saying Trump is fascism, just saying Fascism is another option which appealed to poor people in WWII) is not a replacement for that.

manfredo 7y ago

Were that the case, we'd see a prevalence of people unable to afford cars. This is not the case. The cost of an automobile is an even smaller fraction of an average person's disposable income than it was during Henry Ford's day. And this isn't considering the fact that a modern car is far safer, more comfortable, more fuel efficient, and just broadly way better than a model T. American workers are too highly paid to make many manufacturing jobs viable in the US. If GM et al. were to pay American workers more they would either not be making enough money to stay afloat, or the cost of their cars would rise considerably (and likely lose sales and not be profitable anyway).

chillwaves 7y ago
Financing is a thing.
ejanus 7y ago
But Fiat doubled headcount, how was that possible if your argument that labour cost is the issue ? Let's not follow garden economics, greedy and laziness may be the root. BTW other auto companies are expanding except GM. The real storm would be when next time they need bailout , would they be bailed out as US company?
- adventured 7y ago
  > But Fiat doubled headcount ... BTW other auto companies are expanding except GM GM's business is shrinking while most automakers have expanded in the last five years. It makes perfect sense that GM would contract their employee count as sales decline backwards by nearly two decades. GM sales 2014: $155b | 2018: $147b Their sales in 2005 were $193b by comparison. Automotive sales were $158b that same year. Fiat sales 2014: €96b | 2018: €110b Volkswagen sales 2014: €202b | 2018: €235b Toyota sales 2015: ¥27.2t | ¥30.2t Ford sales 2014: $144b | 2018: $160b Honda sales 2015: ¥13.3t | 2019: ¥15.9t
cityzen 7y ago
I think the only American workers that are paid too highly for manufacturing jobs to thrive in the US are folks like this: As Chairman and Chief Executive Officer at GENERAL MOTORS CO, Mary T. Barra made $21,870,450 in total compensation. Of this total $2,100,000 was received as a salary, $4,452,000 was received as a bonus, $3,425,006 was received in stock options, $11,081,760 was awarded as stock and $811,684 came from other types of compensation. This information is according to proxy statements filed for the 2018 fiscal year.

bumby 7y ago

This is actually a myth (or clever PR) about Ford raising the wage to enable his employees to buy the product they were creating. There's been numerous reports that show the economics of that don't really make sense. The wage raise was actually to prevent turnover to improve productivity; it wasn't uncommon to have people walk off the assembly line mid-shift, shutting down production. https://www.forbes.com/sites/timworstall/2012/03/04/the-story-of-henry-fords-5-a-day-wages-its-not-what-you-think/#a204637766d2 https://www.forbes.com/sites/timworstall/2012/03/04/the-stor...

ousta 7y ago

he actually lost this battle while he was alive: https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.