UAW Demands 46% Pay Hike

[akirby]

Wage increases were due because of inflation regardless of UAW negotiations.  It probably played a factor in the timing.  These employees enjoy a good relationship with their employers and are making far more money than they would without the auto plants.  They want no part of the adversarial union relationships, possible strikes and protecting bad workers.  The companies will point out they have a big cost advantage and can grow their market share which will ensure job security.  

[rperez817]

15 minutes ago, akirby said:

The companies will point out they have a big cost advantage and can grow their market share which will ensure job security.  

 

And UAW should point out the fallacies in those corporations' arguments regarding so called "cost advantages", "growing market share", and "job security".

[Bob Rosadini]

On 10/31/2023 at 3:32 PM, akirby said:

If they build a new plant and close an old one then transfer the workers I don’t think that will be a problem.  And nothing in a contract is permanent although I agree it will be a sticky point down the road.

On that same thought, is the land value of any of these facilities such that it makes sense to close??   And any  new plant on lesser cost land could be built with automation efficiencies in mind???

[grbeck]

50 minutes ago, rperez817 said:

 

And UAW should point out the fallacies in those corporations' arguments regarding so called "cost advantages", "growing market share", and "job security".

 

 

What fallacies?

 

The transplants don't enjoy cost advantage over the old Big Three...?  That has been extensively documented. For example, the daily unscheduled absentee rate at the Big Three plants generally runs at about 12-14 percent. It's non-existent at the transplant operations. 

 

The market share of GM, Ford and Stellantis is not growing. The former Big Three now have less than 40 percent of the domestic market. GM alone, during its heyday, had between 42-44 percent. 

 

 

 

 

[ice-capades]

1 hour ago, grbeck said:

The market share of GM, Ford and Stellantis is not growing. The former Big Three now have less than 40 percent of the domestic market. GM alone, during its heyday, had between 42-44 percent. 

 

And Ford's market share alone was 25% at one point. And back in the late '80's (?) and '90's when volume sales were the rule, regardless of profit margins, Ford had 6 of the top 10 selling vehicle lines. The Thunderbird decline started with the '87 Model Year and then accelerated dramatically when the all-new '89 Thunderbird was introduced with substantially higher prices due to all the standard equipment that was added. The Taurus decline accelerated after the introduction of the all-new '96 Taurus "Oval" design. 

Edited November 2, 2023 by ice-capades
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[grbeck]

16 minutes ago, ice-capades said:

 

And Ford's market share alone was 25% at one point. And back in the late '80's (?) and '90's when volume sales were the rule, regardless of profit margins, Ford had 6 of the top 10 selling vehicle lines. The Thunderbird decline started with the '87 Model Year and then accelerated dramatically when the all-new '89 Thunderbird was introduced with substantially higher prices due to all the standard equipment that was added. The Taurus decline accelerated after the introduction of the all-new '96 Taurus "Oval" design. 

 

The market for personal luxury coupes began declining in the late 1980s. I remember a survey that showed buyers of sport utility vehicles tended to be those who would have bought a personal luxury coupe.

 

With the 1996 Taurus, Ford tried to replicate the success of the 1986 model. Unfortunately, Ford forgot that the radical approach works when a company is coming from behind (as Ford had to do in the early 1980s, and Chrysler later did with the Dodge pickup in the early 1990s). When a company IS one of the leaders in a segment, then it's best to build upon the success of the prior models. The 1996 Taurus had many worthwhile quality and mechanical upgrades, but the styling was too radical, and not that attractive. 

Edited November 2, 2023 by grbeck

[ice-capades]

Ford Workers at Michigan Assembly Vote in Favor of UAW Deal

https://fordauthority.com/2023/11/ford-workers-at-michigan-assembly-vote-in-favor-of-uaw-deal/

 

The United Auto Workers (UAW) strike began at the Ford Michigan Assembly plant back in mid-September, after which it expanded to include the Chicago Assembly plant and Kentucky Assembly plant. Ford reached a tentative deal with the union just last week that includes a massive product investment from the automaker, which ended that strike, and a few days later, its Detroit Big Three counterparts – General Motors and Stellantis – followed suit. However, UAW members must still vote on the tentative deal before it can officially take effect, and that process began yesterday at the Ford Michigan Assembly plant – where workers officially voted in favor of the new contract, according to the Associated Press.

 

A grand total of 81 percent of productions workers and 90 percent of skilled trades workers at MAP voted to approve the new contract between the UAW and Ford. Around 3,300 UAW workers walked out of the same plant back in mid-September, and remained on the picket lines until last Wednesday, when the two sides came to the tentative agreement. Now, the vote will move on to additional FoMoCo plants, with this process expected to be completed by the middle of November.

Thus far, the details of Ford’s tentative agreement with the UAW include a 25 percent general pay increase across the lifespan of the contract, as well as the aforementioned multi-billion dollar investment on Ford’s part into its current and future plants and products, plus various other concessions.

 

Additionally, the old eight-year wage progression has been reduced to three years, while those with three or more years of service will automatically be bumped up to top pay if the deal is ratified. Cost of living adjustments will also make a return after they went away back in 2009 during the recession, and temporary employees will become full-time after 90 days of service once/if the deal if ratified, with future temp hires hitting that point in nine months.

Edited November 2, 2023 by ice-capades
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[ice-capades]

A grand total of 81 percent of productions workers and 90 percent of skilled trades workers at MAP voted to approve the new contract between the UAW and Ford.

 

In my opinion, these approval rates indicate that Ford paid way too much to reach the tentative agreement. Now Ford, and then GM and Stellantis, can enjoy paying the "price" as their vehicle costs increase an estimated $800-900 each. They may try to absorb part of the increased costs and improve efficiency but there will be an impact on vehicle pricing at some point. 

[grbeck]

39 minutes ago, ice-capades said:

A grand total of 81 percent of productions workers and 90 percent of skilled trades workers at MAP voted to approve the new contract between the UAW and Ford.

 

In my opinion, these approval rates indicate that Ford paid way too much to reach the tentative agreement. Now Ford, and then GM and Stellantis, can enjoy paying the "price" as their vehicle costs increase an estimated $800-900 each. They may try to absorb part of the increased costs and improve efficiency but there will be an impact on vehicle pricing at some point. 

 

Puts into perspective the UAW's attempt to cast William Clay Ford, Jr., and the Ford executive team as the reincarnation of Harry Bennett. 

[akirby]

3 hours ago, rperez817 said:

 

And UAW should point out the fallacies in those corporations' arguments regarding so called "cost advantages", "growing market share", and "job security".

Everything you say is a fallacy.  When you pay $85/hr and the competition only pays $60 then it costs you far more to build the same vehicle.  You can cut prices and still make a profit while the competition loses money.

 

 

[rperez817]

19 minutes ago, akirby said:

When you pay $85/hr and the competition only pays $60 then it costs you far more to build the same vehicle.  

 

Labor costs are about 5% of vehicle product cost to automakers, so it does not "cost you far more to build the same vehicle". And the proper solution in this example is to get the competition who pays its workforce $60/hr to raise rates closer to $85/hr.

[grbeck]

8 minutes ago, rperez817 said:

 

Labor costs are about 5% of vehicle product cost to automakers, so it does not "cost you far more to build the same vehicle". And the proper solution in this example is to get the competition who pays its workforce $60/hr to raise rates closer to $85/hr.

 

Labor costs are roughly 12 percent of total vehicle costs. In an industry where engineers work to shave pennies from the cost of a component, that is a significant percentage of the total vehicle cost. 

[ice-capades]

The UAW Strike Might Be Over, But Will Consumers Feel It Later?

Increase labor costs incurred by Ford, GM and Stellantis could be reflected in car prices down the road

https://www.foxbusiness.com/economy/the-uaw-strike-might-be-over-but-will-consumers-feel-it-later

 

The United Auto Workers' six-week strike against Ford, General Motors and Stellantis could be over now that the union has reached tentative deals with each of Detroit's Big Three, but the new labor costs incurred by automakers in the fresh contract agreements may be felt by consumers down the road.

 

Although the strike was limited in its scope, the automakers felt it was due to the UAW shutting down several major assembly plants. The work stoppage cost the industry billions of dollars, and the Big Three all ratified record contracts with the union in order to get production lines running again.

 

Each of the major U.S. automakers agreed to increase their union workers' pay by 25% over the life of the four-and-a-half-year contracts, along with cost-of-living adjustments that Consumer Reports says will push the employee pay hikes to 33% above current levels. 

 

That is a steep increase in labor costs, but some experts say only time will tell whether the raises will amount to higher vehicle prices in the future. Others say vehicle price hikes are inevitable.

 

Data from auto inventory and information tracking firm Edmunds indicates the strike was not long enough to impact vehicle prices in any particular direction in the short term, but a spokesperson told FOX Business the firm's experts say it is too early to tell how added labor costs might affect prices in the long term.

 

 

Ford withdrew its full-year forecast last week citing "uncertainty" over its tentative deal with the UAW, and CFO John Lawler told investors during the company's third-quarter earnings call that the new agreement will add another $850 to $900 in labor costs to each vehicle made.

 

Those increases will either be reflected in new vehicle price tags, absorbed by the company, result in automakers reducing costs in other ways, or some combination of the three.

 

"The concessions the automakers have made are already being positioned as significant by the automakers themselves, which is setting the stage for those costs to be passed through to consumers," Alain Nana-Sinkam, co-founder of industry tracking firm Remarkit Automotive, told CR. "However, given that consumers are already pretty well tapped out in terms of vehicle affordability, I’m not sure how much of that is going to end up sticking."

 

Cox Automotive chief economist Jonathan Smoke said in a statement earlier this week that the new UAW contract will have both positive and negative impacts on the economy.

 

"Union contracts with cost-of-living adjustments contributed to the wage-inflation spiral the economy experienced in the 1970s. And wage gains at UAW plants could increase labor costs in factory towns, as all industries compete for workers," Smoke wrote. "The higher labor costs will also contribute to ongoing inflation in vehicle prices."

 

He added, "Consumers will bear some of the cost burden over time but given that affordability is already a challenge for the market, the automakers will not have an easy time passing along all of the costs to buyers and will have to seek efficiencies in other ways, or further limit production to more expensive vehicles that can absorb higher labor costs."

 

FoxBusiness.com_2023-11-02_The UAW strike might be over, but will consumers feel it later.pdf

Edited November 2, 2023 by ice-capades
Additional Content

[rmc523]

2 hours ago, rperez817 said:

 

Labor costs are about 5% of vehicle product cost to automakers, so it does not "cost you far more to build the same vehicle". And the proper solution in this example is to get the competition who pays its workforce $60/hr to raise rates closer to $85/hr.

 

I haven't the words.....

[Rangers09]

3 hours ago, rperez817 said:

 

Labor costs are about 5% of vehicle product cost to automakers, so it does not "cost you far more to build the same vehicle". And the proper solution in this example is to get the competition who pays its workforce $60/hr to raise rates closer to $85/hr.

 

Appears you believe that wages are the predominant factor in employee job satisfaction. Why should you have any say in what employees at any business are paid?

 

Sorry, but based on numerous studies, in many cases wages (total remuneration) are not the # 1 factor determining job satisfaction for many employees. In many cases it isn't even the # 2 factor. I'll suggest the non-union employees, based on reports on productivity, quality and attendance, are extremely happy with the jobs the have now and their current wage. If they weren't happy, nothing is stopping them from tendering their resignation and moving to apply for a UAW job. Why don't many of them move, because they are happy with the overall package, which is way more than an hourly wage.

 

When I moved to Canada, in my occupation, you started at the bottom and since it was unionised, I grudgingly had to join the closed-shop union. Fortunately, performance was recognised, as were qualifications, so I only suffered the union for 5-years, before promotion to an exempt position. Had I had other options, even paying less, I would have opted for the alternative.

[Footballfan]

On 11/1/2023 at 4:29 PM, fuzzymoomoo said:

The entire Rouge complex is being deemed surplus upon ratification of the new contract. REV-C is dropping one shift, possibly 2 and DTP will remain a 2-shift operation. We’ll see how long Ranger/Bronco demand holds up but I don’t see us being a permanent 3-shift operation. I see it lasting until probably around the end of the decade at most. 

I wonder what "surplus" means?

[fuzzymoomoo]

1 hour ago, Footballfan said:

I wonder what "surplus" means?

They’re losing 2 shifts… kind of speaks for itself. 

[paintguy]

9 hours ago, Bob Rosadini said:

On that same thought, is the land value of any of these facilities such that it makes sense to close??   And any  new plant on lesser cost land could be built with automation efficiencies in mind???

I have often thought Ford Plant closures often coincide with plants with real estate value. Some examples:

 

Edison, NJ Real Estate prices were growing. Land became a shopping center.

Atlanta, Land highly desired by Atlanta and Georgia for the Atlanta Airport.

Norfolk, another high value area sold for $14 million for a mixed use facility.

Twin Cities sold to a developer with intent to build 3,800 housing units.

Wixom became an RV center headquarters and a Menards built as well.

 

Contrast to Chicago, still open, in an area surrounded by long closed factories with no redevelopment plan.

[GearheadGrrrl]

Ford has a whole real estate section of the company, but they seem to operate more like a benevolent estate manager than a profit making operation. For example, TCAP closed in 2011 but demolition and ultimately selling to a developer took a decade- That's a long time to be paying taxes on an unproductive big city property surrounded by expensive homes. Last I heard Ford still owns a farm acquired by Henry near Detroit, and the payback on the Detroit railroad station rehab will probably take a century or more. 

[HotRunrGuy]

1 hour ago, paintguy said:

I have often thought Ford Plant closures often coincide with plants with real estate value. Some examples:

 

Edison, NJ Real Estate prices were growing. Land became a shopping center.

Atlanta, Land highly desired by Atlanta and Georgia for the Atlanta Airport.

Norfolk, another high value area sold for $14 million for a mixed use facility.

Twin Cities sold to a developer with intent to build 3,800 housing units.

Wixom became an RV center headquarters and a Menards built as well.

 

Contrast to Chicago, still open, in an area surrounded by long closed factories with no redevelopment plan.

 

Let's not forget St Louis assembly,,,,,,

 

HRG

[Footballfan]

1 hour ago, paintguy said:

I have often thought Ford Plant closures often coincide with plants with real estate value. Some examples:

 

Edison, NJ Real Estate prices were growing. Land became a shopping center.

Atlanta, Land highly desired by Atlanta and Georgia for the Atlanta Airport.

Norfolk, another high value area sold for $14 million for a mixed use facility.

Twin Cities sold to a developer with intent to build 3,800 housing units.

Wixom became an RV center headquarters and a Menards built as well.

 

Contrast to Chicago, still open, in an area surrounded by long closed factories with no redevelopment plan.

Wixom was a waste.  A lot of the property is a brownfield and Ford still has a landfill there.  Most if the property is undeveloped. 

[akirby]

1 hour ago, paintguy said:

Atlanta, Land highly desired by Atlanta and Georgia for the Atlanta Airport.

It’s now the Porsche Experience Center.

[Footballfan]

33 minutes ago, HotRunrGuy said:

 

Let's not forget St Louis assembly,,,,,,

 

HRG

And Romeo Engine as well.  I read that some closed plants like the old Monroe Stamping plant and the Ford/ Visteon plant in Milan, Michigan are so contaminated that Ford just ended up using them as warehouses instead of selling them. 

[Footballfan]

2 hours ago, fuzzymoomoo said:

They’re losing 2 shifts… kind of speaks for itself. 

I knew when BOC was announced Dearborn would loose the Lightning.  With the third shift being added at MAP and a possible new product at Flat Rock, I'm sure those workers will not have a hard time being placed. 

[tbone]

9 hours ago, ice-capades said:

A grand total of 81 percent of productions workers and 90 percent of skilled trades workers at MAP voted to approve the new contract between the UAW and Ford.

 

In my opinion, these approval rates indicate that Ford paid way too much to reach the tentative agreement. Now Ford, and then GM and Stellantis, can enjoy paying the "price" as their vehicle costs increase an estimated $800-900 each. They may try to absorb part of the increased costs and improve efficiency but there will be an impact on vehicle pricing at some point. 

I don’t see how they won’t have to raise the costs of vehicles to cover this.  It’s either coming from their margin or they are raising prices.  I don’t disagree the approval rate is alarming.