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> 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 t

> 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. Putting the salaries for these jobs at $100,000 and above, Farley argued that they require training. “You can’t work on a diesel F-150 if you haven’t been trained for five years, at a minimum five years,” Farley noted. It’s not a demand problem—there’s plenty of work—but a dire shortage of young people choosing and staying in the trades. I looked into this a bit more, because I wanted to understand how much the Ford CEO's posited solution rested on "you can earn a living if you do a different job!" vs. "You can earn a living at any full-time job at my company". In 2023, the new agreement Ford made with UAW: - Increased starting wages by 68%, from $17 to $28 an hour. - New workers reach the top pay rate in three years, a significant improvement from the previous eight-year progression. - Top wage increased to over $40 an hour.

ZephyrBlu 1y ago
Pretty crazy improvement, seems like he's putting his money where his mouth is
- justin66 1y ago
  Once those UAW workers achieve seniority they might be able to afford a very small house.
  - nerdsniper 1y ago
    In fairness, homes in Detroit can be quite affordable. There are quite a few 2,000 sq. ft. homes listed for <$150,000 that may be 80 years old but are updated with a modern interior look. These would be affordable to a 22-year old factory worker making $80,000 ($40/hr) with no college debt, even if they didn't perfectly optimize their budget. Good school districts are likely to be less affordable though, but cost of raising children is a whole other can of worms.
    - bigyabai 1y ago
      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.
      - nerdsniper 1y ago
        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. Generally unions negotiate for a "last hired, first fired" situation (youngest employees go first) and often more senior employees have "bumping rights" - if their entire specialization is eliminated, they can move laterally by displacing junior workers. It's also fairly difficult for Ford to individually target the most expensive workers because the UAW does a good job of making sure there's real cause for termination. UAW's agreement with Ford contains the usual "last hired, first fired" provision on page 80 here[0] in Article VIII §16(c). "Bumping" is part of the agreement on page 79, VIII §13(b). Perhaps I misunderstood you and you meant that it's hard for workers to get to the "4 year" mark in the first place because Ford can just churn the 1-3 year workers over and over again. The UAW contract also contains a "Preferential Placement Arrangements" clause which gives laid-off workers priority for re-hire whenever Ford is hiring again. Workers can lose their seniority - but there's a bit of a ratchet effect, they have to stay unemployed by Ford for a length of time equal to how long they were employed. So if they've worked there for 2 years, get fired, and are next in line to be rehired 18 months later, they'll enter back in with 3.5 years of seniority from their original date of hire. Ford had no WARN layoffs[1] between 2012-2018 and only 3 in the past 6 years (affecting 4200 workers in total), so generally it seems that workers are able to achieve top-end wages and full seniority before being laid off. 0: https://uaw.org/2023fordcontract/vol-1/#p=80 https://uaw.org/2023fordcontract/vol-1/#p=80 1: https://www.warntracker.com/company/ford-motor-company https://www.warntracker.com/company/ford-motor-company
  - 0xbadcafebee 1y ago
    We need a different metric of wealth generation than home ownership. It used to be very safe, but now it's an anchor as much as it is a lifeline. Home ownership can't pay off forever; eventually either mortgage rates, supply/demand, or construction costs will force homes to either lose value or become too expensive. Those with a house or mortgage are subject to the whims of the market. Home ownership is tax-advantaged because the government wanted to create a real estate market. Well, it's here, but it's not that great anymore, and most people don't get to take advantage of it. So Congress needs to make paying rent tax-deductible.
- sdenton4 1y ago
  Yes, and also: Is it good for a factory for when the average worker has three jobs and only gets six hours of sleep? Sounds like a recipe for recalls...
deleted 1y ago
[deleted]
Kim_Bruning 1y ago
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-minimum-wage/ https://www.saturdayeveningpost.com/2014/01/ford-doubles-min...
- deleted 1y ago
  [deleted]
CamperBob2 1y ago
Why does it take five years' training to "work on" a diesel F-150? That's longer than most undergrad engineering degrees!
- IAmBroom 1y ago
  Because ... arrogant handwaving ... I'm special, that's why!
guywithahat 1y ago
It's incredible how little impact unions have on wages. For decades nobody cared about the wages, then once a non-union shop (Tesla) starts paying significantly more, the Ford CEO takes notice and double wages. One has to wonder if their wages might be higher if it weren't for the UAW, and companies had more flexibility to raise them during strong periods of growth

ZephyrBlu 1y ago

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

justin66 1y ago
Once those UAW workers achieve seniority they might be able to afford a very small house.
- nerdsniper 1y ago
  In fairness, homes in Detroit can be quite affordable. There are quite a few 2,000 sq. ft. homes listed for <$150,000 that may be 80 years old but are updated with a modern interior look. These would be affordable to a 22-year old factory worker making $80,000 ($40/hr) with no college debt, even if they didn't perfectly optimize their budget. Good school districts are likely to be less affordable though, but cost of raising children is a whole other can of worms.
  - bigyabai 1y ago
    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.
    - nerdsniper 1y ago
      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. Generally unions negotiate for a "last hired, first fired" situation (youngest employees go first) and often more senior employees have "bumping rights" - if their entire specialization is eliminated, they can move laterally by displacing junior workers. It's also fairly difficult for Ford to individually target the most expensive workers because the UAW does a good job of making sure there's real cause for termination. UAW's agreement with Ford contains the usual "last hired, first fired" provision on page 80 here[0] in Article VIII §16(c). "Bumping" is part of the agreement on page 79, VIII §13(b). Perhaps I misunderstood you and you meant that it's hard for workers to get to the "4 year" mark in the first place because Ford can just churn the 1-3 year workers over and over again. The UAW contract also contains a "Preferential Placement Arrangements" clause which gives laid-off workers priority for re-hire whenever Ford is hiring again. Workers can lose their seniority - but there's a bit of a ratchet effect, they have to stay unemployed by Ford for a length of time equal to how long they were employed. So if they've worked there for 2 years, get fired, and are next in line to be rehired 18 months later, they'll enter back in with 3.5 years of seniority from their original date of hire. Ford had no WARN layoffs[1] between 2012-2018 and only 3 in the past 6 years (affecting 4200 workers in total), so generally it seems that workers are able to achieve top-end wages and full seniority before being laid off. 0: https://uaw.org/2023fordcontract/vol-1/#p=80 https://uaw.org/2023fordcontract/vol-1/#p=80 1: https://www.warntracker.com/company/ford-motor-company https://www.warntracker.com/company/ford-motor-company
- 0xbadcafebee 1y ago
  We need a different metric of wealth generation than home ownership. It used to be very safe, but now it's an anchor as much as it is a lifeline. Home ownership can't pay off forever; eventually either mortgage rates, supply/demand, or construction costs will force homes to either lose value or become too expensive. Those with a house or mortgage are subject to the whims of the market. Home ownership is tax-advantaged because the government wanted to create a real estate market. Well, it's here, but it's not that great anymore, and most people don't get to take advantage of it. So Congress needs to make paying rent tax-deductible.
sdenton4 1y ago
Yes, and also: Is it good for a factory for when the average worker has three jobs and only gets six hours of sleep? Sounds like a recipe for recalls...

deleted 1y ago

[deleted]

Kim_Bruning 1y ago

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-minimum-wage/ https://www.saturdayeveningpost.com/2014/01/ford-doubles-min...

deleted 1y ago
[deleted]

CamperBob2 1y ago

Why does it take five years' training to "work on" a diesel F-150? That's longer than most undergrad engineering degrees!

IAmBroom 1y ago
Because ... arrogant handwaving ... I'm special, that's why!

guywithahat 1y ago

It's incredible how little impact unions have on wages. For decades nobody cared about the wages, then once a non-union shop (Tesla) starts paying significantly more, the Ford CEO takes notice and double wages. One has to wonder if their wages might be higher if it weren't for the UAW, and companies had more flexibility to raise them during strong periods of growth