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I wonder if they'd settle for a (retroactive relatively) reduction in CEO Pay, coupled by an increase of at least the CEO's pay increase or better relative to t

I wonder if they'd settle for a (retroactive relatively) reduction in CEO Pay, coupled by an increase of at least the CEO's pay increase or better relative to the last contract period. ## HYPOTHETICAL EXAMPLE ## + Prior to contract CEO made 10,000,000 per year. Since then they (currently) make 14,000,000 per year. + Union is asking for 40% increase to match CEO's increase. ? Would the union accept CEO's total compensation package, including retroactive to cover the same period, decrease to E.G. 20% (CEO now makes 12,000,000 per year in this hypothetical) with a union member INCREASE of 20% or greater (possibly including a one time contract signing bonus to cover the back period)?

kemotep 3y ago
Is the CEO cut in pay to cover the costs of pay raises? The article mentions that 13,000 workers will be striking but if we round that down to 10,000 a 2 million dollar CEO pay cut would cover a 10 cent per hour pay raise for those workers. This strike is against all three major US automakers so matched between all three CEOs would be a 30 cent per hour raise. And there are 150,000 UAW members. I imagine the workers are asking for more than a few hundred dollar in annual salary raise. A 20% pay raise of 10,000 people making $50,000 a year would cost 100 million dollars.
- iancmceachern 3y ago
  Not the point. The point is, if company has enough to give thr CEO a raise, they have enough to give the average employees raises. Further than that, they should prioritize the average employee. Meaning, if they have extra money, give it to the average employees first, then if there is leftover, give it to the management. A rising tide raises all ships.
  - kemotep 3y ago
    More my point is that the shareholders need to accept less profits. It would cost Ford, if they had all 150,000 UAW, only 4% of their profits from last year to give out the 6 billion dollars necessary to give a 40% raise if those workers made 100,000 per year. And the CEO’s raise of 4 million is a fraction of a percentage of that. I understand your point but the math doesn’t make sense when you talk about a few million dollars for the CEO. The 4 million dollar raise is 1% of the money necessary to give 10,000 workers 40,000. Yes the workers deserve a raise, and so that’s why they are striking. The CEO’s raise at this time is simply poor taste but not an apples to apples comparison. If instead of a union, these companies had a codetermination model like in Germany this whole matter wouldn’t happen.
    - abduhl 3y ago
      Ford’s profit in 2022 was $24 billion. $6B represents 25% of that, not 4%.
      - kemotep 3y ago
        They don’t employ all 150,000 union members and a 40% raise is on average likely to be less than 40,000 but the points are still the same. Reducing the CEO’s salary to give the workers a raise of more than a few cents would require the CEO to pay hundreds of millions of dollars. So it has to come from profits or costs have to go up. This[0] statement from Ford does align with what you are saying, I clearly misread the 150 billion number which was revenue. However they claim to have over 30 billion in cash it looks like. 2 billion of that could cover $40,000 raises for up to 50,000 employees for the next 15 years. Even splitting that by raising costs by some fraction of a percentage, taking out half a billion from the cash and then 1 billion from the profits is more mathematically sound than just saying the CEO should take a cut to cover the costs of the raise. [0]: https://media.ford.com/content/dam/fordmedia/North%20America/US/2023/02/02/People,%20Plan,%20Products%20Position%20Ford%20Well%20for%20'Pivotal'%202023%20Despite%20Effect%20of%20Volume%20Shortfall%20on%20Q4,%20Full-Year%202022%20Results.pdf https://media.ford.com/content/dam/fordmedia/North%20America...
    - alephnerd 3y ago
      > It would cost Ford, if they had all 150,000 UAW, only 4% of their profits from last year to give out the 6 billion dollars necessary to give a 40% raise if those workers made 100,000 per year Ford's net income (aka profit/loss) in 2022 (FY23) was ~ -$2.1B Billion [1]. The raise would effectively add an additional $6B loss. Think about it this way - how often do you see a brand new Big 3 car? At least in the Bay Area it's not often - it's mostly Tesla, Japanese (Toyota, Lexus, Honda, Acura, Nissan), Korean (Hyundai, Kia), and German (BMW, Mercedes, Volkswagen) automakers. And I've see a similar split both across the west and east coasts. Eg. In 2022, the big 3 represented ~40-45% of new car sales in the US, with an average of 10% decreases in sales across the board [0]. And unlike Japanese, Korean, or German players, the Big 3 are shut out or divested out of the Asian market (eg. China, India, ASEAN) meaning no growth market in the horizon. There isn't that much money left for the Big 3 to generate profits when enough people aren't buying their products. [0] - https://www.carpro.com/blog/full-year-2022-national-auto-sales-by-brand https://www.carpro.com/blog/full-year-2022-national-auto-sal... [1] - https://www.macrotrends.net/stocks/charts/F/ford-motor/net-income-loss https://www.macrotrends.net/stocks/charts/F/ford-motor/net-i...
- deleted 3y ago
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eesmith 3y ago
No. Why should it? The article points out how union members are still affected by concessions they made in 2008 to help auto companies then. It would therefore be inappropriate to use "relative to the last contract period" as the baseline. If it were about simple disparity, that disparity has grown for far longer than the most recent contract period. Back in the 1960s the average ratio between CEO pay and average worker pay was 20x, and now it's close to 400x. Extending your argument to the longer baseline, if the CEO's pay were reduced by 20x and the worker pay increased to 20x, retroactive to 1970, then I'm pretty sure they would agree. But the point isn't simply that the CEO made X% more since the last contract so union workers should get X% more too. If it were, then consider GM CEO Mary Barra, who made nearly $29 million in 2022. She could cut her income by 30% and still make good money - Ford CEO Jim Farley "only" makes $21 million. Cutting her compensation wouldn't justify cutting the salary for everyone at GM by 30% for the next contract period. BTW, this sort of question works better with actual numbers. From https://www.npr.org/2023/09/13/1198938942/high-ceo-pay-inequality-labor-union-uaw-workers https://www.npr.org/2023/09/13/1198938942/high-ceo-pay-inequ... : > "The Big Three CEOs saw their pay increase by 40% over the last four years, while our pay only went up by 6%," UAW President Shawn Fain said at a news conference last week. > As of Tuesday, the UAW is proposing an approximately 40% compounded wage increase over the course of a four-year contract, a tad lower than its opening bid of 46%. Also, as an indication of how looking only relative to the recent contract period isn't enough: > The average hourly wage for workers manufacturing motor vehicles and parts, adjusted for inflation, has dropped by more than 20% in the past two decades, according to data from the U.S. Bureau of Labor Statistics. 0.8 * (1 + 0.4) = 1.12 so what the union wants would be about a 10% gain since 2000.
- qeternity 3y ago
  > The article points out how union members are still affected by concessions they made in 2008 to help auto companies then. UAW were a huge reason Detroit was in such bad shape in 2008. I wouldn’t call those concessions.
  - eesmith 3y ago
    Hmm, who to trust - an HN commenter or an NPR reporter. Or the NYT reporter at https://www.nytimes.com/2008/12/04/business/04auto.html https://www.nytimes.com/2008/12/04/business/04auto.html . Or the WSJ reporter at https://www.wsj.com/articles/SB122832097499675993 https://www.wsj.com/articles/SB122832097499675993 . Would you prefer the term "sacrifice"? That's how GM described it. ("Importantly, the Plan requires considerable sacrifices from all stakeholders—unions, bondholders, dealers, suppliers, retirees, active employees and executives." - https://www.sec.gov/Archives/edgar/data/40730/000095015209001529/k47452ae425.htm https://www.sec.gov/Archives/edgar/data/40730/00009501520900... ) Switching to GM's preferred term seems only a surface detail. Compare "Time to make up for 15 years of concessions" with "time to make up for 15 years of sacrifice". Given the decades of "it's your fault! no it's your fault!" in the antagonistic corporate/union relationship, do you really think it can be resolved in an HN comment? In any case, my point is the imposition of an arbitrary date means asserting without evidence that the relevant parties will accept that as a fair starting point.

kemotep 3y ago

Is the CEO cut in pay to cover the costs of pay raises? The article mentions that 13,000 workers will be striking but if we round that down to 10,000 a 2 million dollar CEO pay cut would cover a 10 cent per hour pay raise for those workers. This strike is against all three major US automakers so matched between all three CEOs would be a 30 cent per hour raise. And there are 150,000 UAW members. I imagine the workers are asking for more than a few hundred dollar in annual salary raise. A 20% pay raise of 10,000 people making $50,000 a year would cost 100 million dollars.

iancmceachern 3y ago
Not the point. The point is, if company has enough to give thr CEO a raise, they have enough to give the average employees raises. Further than that, they should prioritize the average employee. Meaning, if they have extra money, give it to the average employees first, then if there is leftover, give it to the management. A rising tide raises all ships.
- kemotep 3y ago
  More my point is that the shareholders need to accept less profits. It would cost Ford, if they had all 150,000 UAW, only 4% of their profits from last year to give out the 6 billion dollars necessary to give a 40% raise if those workers made 100,000 per year. And the CEO’s raise of 4 million is a fraction of a percentage of that. I understand your point but the math doesn’t make sense when you talk about a few million dollars for the CEO. The 4 million dollar raise is 1% of the money necessary to give 10,000 workers 40,000. Yes the workers deserve a raise, and so that’s why they are striking. The CEO’s raise at this time is simply poor taste but not an apples to apples comparison. If instead of a union, these companies had a codetermination model like in Germany this whole matter wouldn’t happen.
  - abduhl 3y ago
    Ford’s profit in 2022 was $24 billion. $6B represents 25% of that, not 4%.
    - kemotep 3y ago
      They don’t employ all 150,000 union members and a 40% raise is on average likely to be less than 40,000 but the points are still the same. Reducing the CEO’s salary to give the workers a raise of more than a few cents would require the CEO to pay hundreds of millions of dollars. So it has to come from profits or costs have to go up. This[0] statement from Ford does align with what you are saying, I clearly misread the 150 billion number which was revenue. However they claim to have over 30 billion in cash it looks like. 2 billion of that could cover $40,000 raises for up to 50,000 employees for the next 15 years. Even splitting that by raising costs by some fraction of a percentage, taking out half a billion from the cash and then 1 billion from the profits is more mathematically sound than just saying the CEO should take a cut to cover the costs of the raise. [0]: https://media.ford.com/content/dam/fordmedia/North%20America/US/2023/02/02/People,%20Plan,%20Products%20Position%20Ford%20Well%20for%20'Pivotal'%202023%20Despite%20Effect%20of%20Volume%20Shortfall%20on%20Q4,%20Full-Year%202022%20Results.pdf https://media.ford.com/content/dam/fordmedia/North%20America...
  - alephnerd 3y ago
    > It would cost Ford, if they had all 150,000 UAW, only 4% of their profits from last year to give out the 6 billion dollars necessary to give a 40% raise if those workers made 100,000 per year Ford's net income (aka profit/loss) in 2022 (FY23) was ~ -$2.1B Billion [1]. The raise would effectively add an additional $6B loss. Think about it this way - how often do you see a brand new Big 3 car? At least in the Bay Area it's not often - it's mostly Tesla, Japanese (Toyota, Lexus, Honda, Acura, Nissan), Korean (Hyundai, Kia), and German (BMW, Mercedes, Volkswagen) automakers. And I've see a similar split both across the west and east coasts. Eg. In 2022, the big 3 represented ~40-45% of new car sales in the US, with an average of 10% decreases in sales across the board [0]. And unlike Japanese, Korean, or German players, the Big 3 are shut out or divested out of the Asian market (eg. China, India, ASEAN) meaning no growth market in the horizon. There isn't that much money left for the Big 3 to generate profits when enough people aren't buying their products. [0] - https://www.carpro.com/blog/full-year-2022-national-auto-sales-by-brand https://www.carpro.com/blog/full-year-2022-national-auto-sal... [1] - https://www.macrotrends.net/stocks/charts/F/ford-motor/net-income-loss https://www.macrotrends.net/stocks/charts/F/ford-motor/net-i...
deleted 3y ago
[deleted]

eesmith 3y ago

No. Why should it? The article points out how union members are still affected by concessions they made in 2008 to help auto companies then. It would therefore be inappropriate to use "relative to the last contract period" as the baseline. If it were about simple disparity, that disparity has grown for far longer than the most recent contract period. Back in the 1960s the average ratio between CEO pay and average worker pay was 20x, and now it's close to 400x. Extending your argument to the longer baseline, if the CEO's pay were reduced by 20x and the worker pay increased to 20x, retroactive to 1970, then I'm pretty sure they would agree. But the point isn't simply that the CEO made X% more since the last contract so union workers should get X% more too. If it were, then consider GM CEO Mary Barra, who made nearly $29 million in 2022. She could cut her income by 30% and still make good money - Ford CEO Jim Farley "only" makes $21 million. Cutting her compensation wouldn't justify cutting the salary for everyone at GM by 30% for the next contract period. BTW, this sort of question works better with actual numbers. From https://www.npr.org/2023/09/13/1198938942/high-ceo-pay-inequality-labor-union-uaw-workers https://www.npr.org/2023/09/13/1198938942/high-ceo-pay-inequ... : > "The Big Three CEOs saw their pay increase by 40% over the last four years, while our pay only went up by 6%," UAW President Shawn Fain said at a news conference last week. > As of Tuesday, the UAW is proposing an approximately 40% compounded wage increase over the course of a four-year contract, a tad lower than its opening bid of 46%. Also, as an indication of how looking only relative to the recent contract period isn't enough: > The average hourly wage for workers manufacturing motor vehicles and parts, adjusted for inflation, has dropped by more than 20% in the past two decades, according to data from the U.S. Bureau of Labor Statistics. 0.8 * (1 + 0.4) = 1.12 so what the union wants would be about a 10% gain since 2000.

qeternity 3y ago
> The article points out how union members are still affected by concessions they made in 2008 to help auto companies then. UAW were a huge reason Detroit was in such bad shape in 2008. I wouldn’t call those concessions.
- eesmith 3y ago
  Hmm, who to trust - an HN commenter or an NPR reporter. Or the NYT reporter at https://www.nytimes.com/2008/12/04/business/04auto.html https://www.nytimes.com/2008/12/04/business/04auto.html . Or the WSJ reporter at https://www.wsj.com/articles/SB122832097499675993 https://www.wsj.com/articles/SB122832097499675993 . Would you prefer the term "sacrifice"? That's how GM described it. ("Importantly, the Plan requires considerable sacrifices from all stakeholders—unions, bondholders, dealers, suppliers, retirees, active employees and executives." - https://www.sec.gov/Archives/edgar/data/40730/000095015209001529/k47452ae425.htm https://www.sec.gov/Archives/edgar/data/40730/00009501520900... ) Switching to GM's preferred term seems only a surface detail. Compare "Time to make up for 15 years of concessions" with "time to make up for 15 years of sacrifice". Given the decades of "it's your fault! no it's your fault!" in the antagonistic corporate/union relationship, do you really think it can be resolved in an HN comment? In any case, my point is the imposition of an arbitrary date means asserting without evidence that the relevant parties will accept that as a fair starting point.