Strike

[Q6543]

They’re really only asking for what top brass gave to themselves over the last few years.

Good for the goose… so now the gander

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[BlackFerret69]

From everything I have read, they are going to strike at all three, even if it is only one holding up negotiations. A hardcore peer pressure.

I will believe no strike when on September 15th, they announce no strike.

That said, there is no scheduling at Ford for the next production weeks. That tells me that they are anticipating and preparing for a strike.

 

[Dub347sbf]

From everything I have read, they are going to strike at all three, even if it is only one holding up negotiations. A hardcore peer pressure.

I will believe no strike when on September 15th, they announce no strike.

That said, there is no scheduling at Ford for the next production weeks. That tells me that they are anticipating and preparing for a strike.

They will schedule next week for November whether they were preparing for a strike or not, they typically dont schedule first week of the month.

They already have the whole month of October scheduled as well.

 

[Skye]

How much does labor add to the cost of a vehicle on average?

Curious myself, I pulled some insight this AM.

The last contract was ratified in 2019. Below is an article citing general numbers for how much labor costs go into the overall price of each vehicle, from 2019 - 2023.

https://www.spglobal.com/marketintelligence/en/news-insights/trending/Fic7Dwvvxuh14hs9rmjwJw2

"Estimated per-vehicle labor cost for GM would be $3,378 in 2023, up 25.1% from $2,700 in 2018. Estimated 2023 costs for Ford will be $3,131, up 20.2% from $2,604 in 2018. Fiat Chrysler's estimated 2023 costs would be $3,481, up 38.2% from 2018."

UAW's package, if accepted as-is, would have a total lifetime cost of $80B. I say lifetime, because, while there are some immediate costs over four years, items like pension and healthcare are spread over someone's lifetime.

https://www.cnbc.com/2023/08/18/what-uaw-negotiations-could-cost-gm-ford-and-stellantis.html

Some comparisons, from UAW and Ford.

https://uaw.org/president-fains-big-three-contract-update-ford-proposal-insults-worth/

https://media.ford.com/content/ford...aw-contract-offer--significant-pay-incre.html

From Ford's press release, from 2019 to present, Ford spent $7.4B compensating (pay, healthcare, pension, time off) UAW employees.

I attempted to quantify the cost of Ford's 2023 proposal, and could not. While we know the cost of UAW's proposal, it's a safe bet it's high, so they can concede some items and get what they really want. Ford is probably doing same, willing to come up while UAW is coming down.

Going back to the article citing labor costs, "Estimated 2023 costs for Ford will be $3,131, up 20.2% from $2,604 in 2018. "

From 2019 to 2023, Ford's labor costs increased 5% a year, roughly in-line with inflation.

https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=1&year1=201901&year2=202301

If we accept the current cost as $3,131 and take 5% of that, we get an additional $156.55 per year, per vehicle from 2023 onward. While these are rough numbers if things stayed linear, they give a general idea how much these costs are and how much they'd increase for Ford if a like (2019-2023) agreement is ratified.

As the discussion continues, consider many of the $ figures listed (any industry) are sometimes listed as "total compensation". Actuaries add up everything (hourly rate, healthcare, education, 401K matching, etc) and arrive at an effective hourly rate. Peoples' base pay, their actual hourly pay, is often markedly different than their total compensation rate. Employees look at their hourly rate, what they take home, while employers look at total compensation rates.

Ford employs and sub-contracts people the world over. While the numbers I'm using are biased to UAW and current negotiations, non-UAW employees have their pay and benefits (raises, pension, healthcare, education programs, etc.) to, all of which are increasing costs to Ford and others.

Ford (the entire company) lost money two of the last four years:

https://www.cnbc.com/quotes/FORD?tab=financials

$14.8B in net income, four years, total.

GM's net income (all positive, each year), four of the last four years:

https://www.cnbc.com/quotes/GM?tab=financials

$33.1B in net income, four years, total.

Stellantis's net income (all positive, each year), four of the last four years:

https://www.cnbc.com/quotes/STLA?tab=financials

$33.4B in net income, four years, total.

Total Net Income, Ford, GM and Stellantis, 2019-2022: $81.3B.

Projected cost of UAW contract, UAW's proposal, accepted as-is: $80B.

 

[Q6543]

Awesome breakdown, so the average price of a new ford is 57K making labor costs about 6% all in.

1/3 of that 6% roughly goes to benefits etc… a 40% raise(which I agree is high) would only add 2% tops to the bottom line …either eating into profit margins or adding $1200 to average vehicle prices.

Not great but not the end of the world.

 

[BrianJ77]

I'm going to go to my boss and tell him I only want to work 32 hours a week, but pay me for 40. Who comes up with this? I'm all for fair wages for fair work, but not great wages for no work. There's a middle ground where everyone wins. Fain is wanting too much for too little.

 

[goodlettjr]

I would like to see UAW costs listed on the window sticker for each vehicle. Labor based upon options ordered. I think people (genera public) would not be as supportive of the wild asks from the UAW at that point.

 

[2024S650]

I'm going to go to my boss and tell him I only want to work 32 hours a week, but pay me for 40. Who comes up with this? I'm all for fair wages for fair work, but not great wages for no work. There's a middle ground where everyone wins. Fain is wanting too much for too little.

It’s the new America……lots of folks collected enhanced unemployment for two years when employers could not give a job away. Why work at all when the government will take care of you with the hard earned tax dollars of those that do work. Must be nice to buy votes and stay in power with my money.

 

[dfwford]

Curious myself, I pulled some insight this AM.

The last contract was ratified in 2019. Below is an article citing general numbers for how much labor costs go into the overall price of each vehicle, from 2019 - 2023.

https://www.spglobal.com/marketintelligence/en/news-insights/trending/Fic7Dwvvxuh14hs9rmjwJw2

"Estimated per-vehicle labor cost for GM would be $3,378 in 2023, up 25.1% from $2,700 in 2018. Estimated 2023 costs for Ford will be $3,131, up 20.2% from $2,604 in 2018. Fiat Chrysler's estimated 2023 costs would be $3,481, up 38.2% from 2018."

UAW's package, if accepted as-is, would have a total lifetime cost of $80B. I say lifetime, because, while there are some immediate costs over four years, items like pension and healthcare are spread over someone's lifetime.

https://www.cnbc.com/2023/08/18/what-uaw-negotiations-could-cost-gm-ford-and-stellantis.html

Some comparisons, from UAW and Ford.

https://uaw.org/president-fains-big-three-contract-update-ford-proposal-insults-worth/

https://media.ford.com/content/ford...aw-contract-offer--significant-pay-incre.html

From Ford's press release, from 2019 to present, Ford spent $7.4B compensating (pay, healthcare, pension, time off) UAW employees.

I attempted to quantify the cost of Ford's 2023 proposal, and could not. While we know the cost of UAW's proposal, it's a safe bet it's high, so they can concede some items and get what they really want. Ford is probably doing same, willing to come up while UAW is coming down.

Going back to the article citing labor costs, "Estimated 2023 costs for Ford will be $3,131, up 20.2% from $2,604 in 2018. "

From 2019 to 2023, Ford's labor costs increased 5% a year, roughly in-line with inflation.

https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=1&year1=201901&year2=202301

If we accept the current cost as $3,131 and take 5% of that, we get an additional $156.55 per year, per vehicle from 2023 onward. While these are rough numbers if things stayed linear, they give a general idea how much these costs are and how much they'd increase for Ford if a like (2019-2023) agreement is ratified.

As the discussion continues, consider many of the $ figures listed (any industry) are sometimes listed as "total compensation". Actuaries add up everything (hourly rate, healthcare, education, 401K matching, etc) and arrive at an effective hourly rate. Peoples' base pay, their actual hourly pay, is often markedly different than their total compensation rate. Employees look at their hourly rate, what they take home, while employers look at total compensation rates.

Ford employs and sub-contracts people the world over. While the numbers I'm using are biased to UAW and current negotiations, non-UAW employees have their pay and benefits (raises, pension, healthcare, education programs, etc.) to, all of which are increasing costs to Ford and others.

Ford (the entire company) lost money two of the last four years:

https://www.cnbc.com/quotes/FORD?tab=financials

$14.8B in net income, four years, total.

GM's net income (all positive, each year), four of the last four years:

https://www.cnbc.com/quotes/GM?tab=financials

$33.1B in net income, four years, total.

Stellantis's net income (all positive, each year), four of the last four years:

https://www.cnbc.com/quotes/STLA?tab=financials

$33.4B in net income, four years, total.

Total Net Income, Ford, GM and Stellantis, 2019-2022: $81.3B.

Projected cost of UAW contract, UAW's proposal, accepted as-is: $80B.

Here's a TL;DR answer to the same question:

"The current $64 per hour labor costs at Ford, GM and Stellantis are already higher than the $55 per hour cost at non-union U.S. assembly plants of Asian and European automakers, an estimated labor cost gap of about $900 million, according to people familiar with Ford’s costs. Labor costs at EV leader Tesla Inc. are even lower, at $45 an hour to $50 an hour, the people said."

^^^VW is an interesting one. They're a German Automaker, and unions have an even bigger strongerhold over there. They also have nearly 700K employees globally.

Personally, I don't mind paying more for an automobile if it means I'm supporting a workforce that has better pay/benefits/security/morale. But that's just me.

EDIT: And another caveat. Part of the reason the average transaction prices of cars with the Big 3 is higher is because they sell a higher proportion of SUVs and Pickups, which are more expensive fo build due to more costly tooling & material.

 

[rchandler9]

So what do you suppose will happen with my Dark Horse that is built but has not shipped yet?

 

[GTlee57]

So, the optics of "top brass" getting bonuses and such at Ford might play to the average rank and file worker. But, if 186 top brass managers got $500k bonuses each, that equates to $500 for each rank and file employee. It just isn't an apples to apples comparison. A fifty percent raise is absurd in any walk of life that does not have personal skin in the game.
Keep in mind too, that as a publicly traded company, Ford has a fiduciary responsibility to make a profit. Giving away the farm absolutely will negatively impact share prices and lead to other economic issues.
IMO, we started down a very dangerous rabbit hole when Covid hit and people got hooked on handouts. Now, every labor dependent business is experiencing serious worker shortages.

 

[Jivor]

Workers will get what they can, that's what negotiations are for; we'll see how it plays out, but as long as you're actually working, it's not a hand out.

https://fortune.com/2022/04/06/income-inequality-worker-pay-shareholders-buybacks/

As for political bias for Fortune: https://www.allsides.com/news-source/fortune

 

[dollybud]

As someone who's a part of the so-called "corporate class," this take by Fain is delusional:



Us rank & file salaried workers are not the enemy, and he's not helping the UAW's cause by antagonizing us. We're getting screwed as well in many ways (if not more so).

The beef they have should be directef specifically at the shareholders and C-level executives who make the decisions.

I'm from a union family and I'm actully sympathetic to the UAW's demands, BTW.

40% raise for 32 hour but pay for 40 hours. They should ask ask for a 16 hour 2 day work week but pay 32 hours work week. LOL

 

[2024S650]

So, the optics of "top brass" getting bonuses and such at Ford might play to the average rank and file worker. But, if 186 top brass managers got $500k bonuses each, that equates to $500 for each rank and file employee. It just isn't an apples to apples comparison. A fifty percent raise is absurd in any walk of life that does not have personal skin in the game.
Keep in mind too, that as a publicly traded company, Ford has a fiduciary responsibility to make a profit. Giving away the farm absolutely will negatively impact share prices and lead to other economic issues.
IMO, we started down a very dangerous rabbit hole when Covid hit and people got hooked on handouts. Now, every labor dependent business is experiencing serious worker shortages.

That’s been the plan for one party since Johnson’s Great Society and the War on Poverty. Anyway I hope that the two sides come to an agreement that both can live with and cars get produced, it’s all I really care about. I quit watching most any news 3 months ago because it’s too toxic, but the Strike does effect me as I ordered a car recently. However I have a car and don’t worry about when it gets built….

The looming Strike is also making the current sale of in Inventory vehicles harder. Ford just raised their Finance rates yesterday on F150s from 3.9 to 5.9% for 72 mos. I was debating trading my S550 in as my dealer is taking a ton off new F150s but that 2% increase shut me down. My wife has a S650 on order to replace her vehicle and I could use a truck. F150 prices are about 15% higher than 3 years ago so the discount brought the numbers into reality before the rate increases.

 

[Stratman397]

Workers will get what they can, that's what negotiations are for; we'll see how it plays out, but as long as you're actually working, it's not a hand out.

https://fortune.com/2022/04/06/income-inequality-worker-pay-shareholders-buybacks/

As for political bias for Fortune: https://www.allsides.com/news-source/fortune

So it kind of works like this, you’re making say $40 an hour, If they want you to be making 60 bucks an hour. Now, You take the extra 20 bucks an hour, and you raise these vehicles X amount of dollars, why most people are making that extra money because there’s a lot of states like here, that don’t have unions, thank God. So all these other people they don’t get these big raises, they can’t afford to buy the cars because they go up so much in price, So then all of you guys will lose jobs, because people will not be able to buy the cars. Back when we bought our 79 Trans Am, it cost $7700. My husband was making $10 an hour at caterpillar. We were living the dream, well in 44 years, my husband salary has gone up about four times that amount, But cars have gone up more than six or seven times that amount. This country can not run like that

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