30% salary cut at Ford

[Evan]

Average pay is $28 per hour. At 2k hours per year, a UAW employee makes $56,000 gross.

You also need to include pension, health, etc. Once you do the average rate (of legacy workers) goes up to almost $70/hour.

 

[daniel3507]

dad just got layed off from ford credit this morning. 20 some odd years and ranked number one in the state apparently isnt enough to keep a job. they decided to keep a guy that only has 8 years with the company and a lady who hasnt been there as long as him. (my guess is they kept her because she is a minority and female. just speculation though)

 

[Evan]

dad just got layed off from ford credit this morning. 20 some odd years and ranked number one in the state apparently isnt enough to keep a job. they decided to keep a guy that only has 8 years with the company and a lady who hasnt been there as long as him. (my guess is they kept her because she is a minority and female. just speculation though)

Probably let him go cause he was the highest paid, due to his seniority and performance.

 

[thegoat4]

You also need to include pension, health, etc. Once you do the average rate (of legacy workers) goes up to almost $70/hour.

That's called the "burden cost." A pay cut will not affect that, meaning it's irrelevant to what I was talking about. So, no, I don't need to include all of that.

Also, that burden cost is a little misleading because it often will include the cost of some management although they are not actually hourly. I don't know if your $70/hour number has that problem since I don't know where your number came from. Google isn't helping because way too many people have thrown it around.

 

[Evan]

That's called the "burden cost." A pay cut will not affect that, meaning it's irrelevant to what I was talking about. So, no, I don't need to include all of that.

Also, that burden cost is a little misleading because it often will include the cost of some management although they are not actually hourly. I don't know if your $70/hour number has that problem since I don't know where your number came from. Google isn't helping because way too many people have thrown it around.

Correct. They need their pay AND benefits cut dramatically to get down to a reasonable level.

Cut the pay down to $14/hour starting, with a 401(k) matching plan. Kill the pensions and everything else, except include a barebones health plan that has a high deductible. I think this is a very generous pay package for someone who has only a high school diploma at best. And Ford would be back on the field to compete.

And the pensions and medical of retirees needs to be cut. That's a HUGE cost, and it was forced unfairly on Ford by the unions in the 80s.

I know that this sounds extreme, but the other alternative is that all the jobs are lost. The current pay/benefits package simply isn't sustainable...it's not even close.

 

[v-8power]

Where i work they tried to tell us that out compensation package was worth 25.oo/hr.
We were in negotiations at the time. We called their bluff and said we would take a 13.00/hr raise and do away with ins. and 401k.

Needless to say they backed off.

I don't care what you say, the unions are not the sole blame for the big three demise.

 

[AKBroncoII]

I agree with some of what you said. I do agree that retiree medical should be cut entirely. I do not however agree that the pension should be cut. What about raising the age for full pension? What is it now? Partial pay cut. Honestly, I'd take a pay cut but if you start talking about cutting my benefits I'd have a new job already. $14 an hour isn't very much. Especially if you cut everything else.

I don't think anything ford does cut wise is going to make a damn bit of difference. No one is buying right now. Take money out of 45,000 workers pockets and there will be even less. Everyone is in the same boat, not just the auto industry. I refuse to buy new, why lose 5-10K on a vehicle value just by driving it off the lot.

I was curious, what do you think is fair for a mechanic then? Shouldn't it be based off of what the going rate is in the area? Percentage?

 

[Evan]

Where i work they tried to tell us that out compensation package was worth 25.oo/hr.
We were in negotiations at the time. We called their bluff and said we would take a 13.00/hr raise and do away with ins. and 401k.

Needless to say they backed off.

I don't care what you say, the unions are not the sole blame for the big three demise.

I'm sure you could find some other factors that negatively affected the big three. Nobody disagrees with that. But we're talking about the MAIN factor here.

The fact remains: with the current inflated union wages, benefits, and legacy costs the big three can't survive. There is absolutely no chance. They've been borrowing money for years to stay afloat, and when no sane private bank would lend to them anymore, they turned to taxpayers. But taxpayers will only put up with this crap for so long.

 

[Evan]

I was curious, what do you think is fair for a mechanic then? Shouldn't it be based off of what the going rate is in the area? Percentage?

Yes, it should be based on the going rate, i.e. market price, i.e. what employers are willing to pay and what employees are willing to work for.

It would be nice to pay all line workers $28/hour. But the reality is we live in a world with limited resources and therefore limited money. The money simply isn't there anymore to pay $28/hour. It hasn't been there for years, and the big three have been financing their payrolls.

In my mind, $14/hour is the best case scenario. The capital and borrowing power of the big three is now so depleated from paying these rediculous wages and benefits, that they may only be able to afford $0/hour, which is bankruptcy. The jobs will go to a right-to-work Republican state in the south if we're lucky. Chances are they'll go overseas, never to return.

 

[skippy]

Yes, it should be based on the going rate, i.e. market price, i.e. what employers are willing to pay and what employees are willing to work for.

It would be nice to pay all line workers $28/hour. But the reality is we live in a world with limited resources and therefore limited money. The money simply isn't there anymore to pay $28/hour. It hasn't been there for years, and the big three have been financing their payrolls.

In my mind, $14/hour is the best case scenario. The capital and borrowing power of the big three is now so depleated from paying these rediculous wages and benefits, that they may only be able to afford $0/hour, which is bankruptcy. The jobs will go to a right-to-work Republican state in the south if we're lucky. Chances are they'll go overseas, never to return.

GM and Ford Assembly plants are closed in Atlanta,Ford plant torn down.

 

[igiveup]

Hello

dad just got layed off from ford credit this morning. 20 some odd years and ranked number one in the state apparently isnt enough to keep a job. they decided to keep a guy that only has 8 years with the company and a lady who hasnt been there as long as him. (my guess is they kept her because she is a minority and female. just speculation though)

My G/F works for Ford Credit in Canada and she is watching things here. Some of them are retiring some are not being replaced when they leave. Ford credit up here has been cutting the fat for the last 6-7 years. That might help for up here.

igiveup

 

[thegoat4]

Correct. They need their pay AND benefits cut dramatically to get down to a reasonable level.

Cut the pay down to $14/hour starting, with a 401(k) matching plan. Kill the pensions and everything else, except include a barebones health plan that has a high deductible. I think this is a very generous pay package for someone who has only a high school diploma at best. And Ford would be back on the field to compete.

And the pensions and medical of retirees needs to be cut. That's a HUGE cost, and it was forced unfairly on Ford by the unions in the 80s.

I know that this sounds extreme, but the other alternative is that all the jobs are lost. The current pay/benefits package simply isn't sustainable...it's not even close.

Every dollar Ford does not pay the working class is a dollar that is effectively removed an already weak economy. If Ford and all other employers do as you suggest and mindlessly push costs down by slashing wages and benefits, all of the working class will sink even further into poverty and there will be no one left to purchase Ford's products. So Ford's decision to cut workers' pay is ever-so-slightly more complex than what will save the company the most money up-front.

As far as the dead-horse argument that unions are the problem, quit repeating that crap you hear on TV. If unions are really the problem, why is Toyota struggling too?

The harsh reality is that nobody sitting in a job interview somewhere else cares what Evan of the TRS forums thinks is fair compensation. Employers are trying to argue pay down while employees are trying to argue pay up. Unions successfully argued their pay up through force of sheer numbers of workers. Yeah, higher education is nice, but a degree won't make you sprout an extra set of hands. You'll have to hire manual labor at some point for some jobs, and if you want a functional economy you have to pay them a living wage. To refuse to do so leads to the mess we have now: nobody has the money to purchase the goods those companies want to produce, so those companies are failing. None of that has anything to do with anyone's arbitrary notion of fairness.

Does it strike anyone else as a catch-22 that because you do not have any higher education you don't deserve benefits and wages that may make such education affordable? College isn't free, you know.

I'm curious. You said, "Ford would be back in the field to compete," if they did as you said. What do you mean? How much do they need to save on benefits and wages to compete? Compete vs. who? What are their wages and benefits? The 401(k) matching plan you specified, match up to what percentage? What's your vestment schedule? Hell, what investments could you make with the employees' plans in today's market that would pay off at all? Where would you cut it off, and how much money do you expect to save that way? So, you start employees off at $14/hour, but how do you doll out raises? Is there a cap? Will you cap vacation and sick days? If so, how do you determine what these caps ought to be? You thought this out, right? You didn't just list off some arbitrary "solutions" you heard on TV, did you?

How does a union go about forcing things unfairly? If the employers have the right to withhold pay raises and benefits because they think it's necessary, do the employees not also have the right to withhold their labor for their own reasons? If the employers don't want to deal with the unions' demands they do actually have the right to cut all of them loose and do the work themselves.

 

[v-8power]

THEGOAT4, lets face it, there are a couple of folks on here that blame the unions for everything.

 

[Evan]

Every dollar Ford does not pay the working class is a dollar that is effectively removed an already weak economy.

Right. But once you're out of money, you CAN'T pay any wages. And rediculous, inflated wages and benefits are one of the major factors that have caused the big three to run out of money. Pay/benefit cuts and job cuts suck, but when there is no money, there is NO other option. Right now, the UAW has a choice: accept substantial pay/benefit cuts or loose the jobs compeletly.

Of course, nobody cares what Evan on TRS thinks a fair wage should be. But the free market and available capital are the deciding factors. The big three have next to 0 capital. It's not rocket science here: if you don't have money, you can't pay people money. The only way they are making payroll right now is by borrowing money at scary interest rates. It's like us putting rent and utilities on our credit cards...


V8-power, nobody is blaming the unions for EVERYTHING. Don't be rediculous. The economic downturn is to blame a little...it has caused the union-death of these companies to come sooner than it would have.

 

[skippy]

Correct. They need their pay AND benefits cut dramatically to get down to a reasonable level.

Cut the pay down to $14/hour starting, with a 401(k) matching plan. Kill the pensions and everything else, except include a barebones health plan that has a high deductible. I think this is a very generous pay package for someone who has only a high school diploma at best. And Ford would be back on the field to compete.

And the pensions and medical of retirees needs to be cut. That's a HUGE cost, and it was forced unfairly on Ford by the unions in the 80s.

I know that this sounds extreme, but the other alternative is that all the jobs are lost. The current pay/benefits package simply isn't sustainable...it's not even close.

Dang,maintenance men around here make $18 per hour,do you want a car made by $14 hr employee?