It's a piercing glimpse into the obvious in a New York Times article without any major revelations, but it's still worth noting the human toll of Ford's shrinking market share and concomitant race to slice its labor costs. As former Detroit News writer Bill Vlasic correctly points out, "Ford’s big new push is not to sell cars. Instead, it is trying to sign up thousands of workers to take buyouts, partly by convincing them that their brightest future lies outside the company that long offered middle-class wages for blue-collar jobs." To that end, the Times embeds a happy-clappy video “Connecting With Your Future" that shows Ford's please-leave-now ex-employees that yes, Virginia, there is life after Ford. Ah, but is there life for Ford? In the middle of Vlasic's sugar coated pill run down, a quote from analyst John Casesa is like a shot to the solar plexus. "These companies are trying to do in the last 24 months what they should have done over the last 24 years,” the head of Casesa Shapiro Group says. “That’s why it’s such a shock to the system.” Just as sadly, it's come to this: "One thing Ford workers are proud of is that their buyout options are more extensive and, in some instances, better paying than those at G.M."
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I disagree. It was absolutely possible to maintain this with just 10% compromise on both sides at the proper time. For instance, instead of the buying spree that resulted in PAG, Ford could have fully funded its pension/health obligations for the next 50 years. But this is with the benefit of 20-20 hindsight, which as we well know, is faultless. History has shown that even Adam Smith missed a couple of calls.
“…Instead, it is trying to sign up thousands of workers to take buyouts, partly by convincing them that their brightest future lies outside the company that long offered middle-class wages for blue-collar jobs.”
I’m very disappointed in the tone of this NYT article. Is this what people believe now, that blue collar labor is undeserving of being included in the middle class and being paid as such?
quasimondo: Yes. People have been voting with their wallets for years, and if they can save a dollar on a shirt at Wal-Mart, they will, even if it means putting their neighbor out of work.
Just as sadly, it’s come to this: “One thing Ford workers are proud of is that their buyout options are more extensive and, in some instances, better paying than those at G.M.”
That is truly sad; Ford workers are actually proud that their buyout options are better…
thalter :
February 26th, 2008 at 10:55 am
quasimondo: Yes. People have been voting with their wallets for years, and if they can save a dollar on a shirt at Wal-Mart, they will, even if it means putting their neighbor out of work.
Welcome to capitalism. I’m sure former USSR residents would tell you this system’s better than the alternative (communism).
However, the car industry isn’t the shirt industry. Outsourcing is just starting, and there are many roadblocks to complete, Wal-Mart-like outsourcing.
As for Wal-Mart, if you’ve never seen Wal-Mart: The High Cost of Low Price, I highly recommend it. Partially contributing to putting another American out of a job is one thing. Violating human rights laws to keep Chinese labor cheap (with the full support of the Chinese “government”) is another.
Shopping at Walmart is very possibly the least “American” thing people can do.
But, ultimately, it is true. What are the highest paying jobs? Do you need an education and a developed skill set to do them? Why are people willing to dump tens of thousands – sometimes hundreds of thousands – of dollars on education? For fun? Assembly workers – low-skilled trades – are going to cheaper, less educated pastures. Even if China didn’t have corrupt government organizations, they still have 1.3 billion people and most of them without a solid education or skills. I argue that if China were even more efficient (ie – less corruption) it would be even worse for the middle-class here in the U.S. Jobs would have gone out faster.
Skilled-trades will remain. It is still a skill that has to be learned even if it is considered blue collar, but even many of the skilled trades make less now than service workers (computer programmers have never formed a union because they command such high wages because of the DEMAND for them and SCARCITY of the talent pool).
We live in a very capitalistic society. Low-skilled workers are a dime a dozen because there are millions of them, and many of them don’t have jobs. Honda was offering 1,500 jobs at $14/hour and got 11,000 applications. They could have offered $10. That’s business, and it’s sad that we as a society can’t seem to decide where we stand. On the one hand we love this capitalistic system, and on the other we want all our unskilled workers to be middle-class. Well, too bad…
Ford is right. The greenest pastures lay outside the company. Not just because Ford is running rough right now, but because even in the long run, working on the line will no longer give you the comfortable suburban life the UAW once got. If you want that, you’ll have to look elsewhere. At least Ford is honest about that.
I’ll second the “Wal-Mart: The High Cost of Low Price”
Enlightening movie.
Should’ve known it’d come down to this. “My package is bigger than yours!”
quasimodo: Is this what people believe now, that blue collar labor is undeserving of being included in the middle class and being paid as such?
Given the pension, job protection, and health care benefits, these were upper middle class jobs for many years. I grew up in UAW country, and have little sympathy.
However, from a medical parts background, I can say there are still good manufacturing jobs in the USA. At entry level the pay is not that good. If you want to move up, double ++ your pay to over UAW rates, you better
1) Have good attendance.
2) Be willing to improve yourself. (You’d be amazed at those who won’t take company paid training)
3) Be willing to take new jobs.
Such attendance, training, pay and job flexibility would never make it into a UAW contract. Which is a major reason they fail.
RobertSD, well said.
Wall Street rewards short term executive thinking. Investors don’t give a damn about product quality, workers or corporate longevity. One or two sputters and their money is gone, invested elsewhere.
Our business school trained MBAs don’t think five or even three years ahead. Why would they? They will be long gone running a different company into the ground by then.