More my point is that the shareholders need to accept less profits.
It would cost Ford, if they had all 150,000 UAW, only 4% of their profits from last year to give out the 6 billion dollars necessary to give a 40% raise if those workers made 100,000 per year. And the CEO’s raise of 4 million is a fraction of a percentage of that.
I understand your point but the math doesn’t make sense when you talk about a few million dollars for the CEO. The 4 million dollar raise is 1% of the money necessary to give 10,000 workers 40,000. Yes the workers deserve a raise, and so that’s why they are striking. The CEO’s raise at this time is simply poor taste but not an apples to apples comparison.
If instead of a union, these companies had a codetermination model like in Germany this whole matter wouldn’t happen.
It would cost Ford, if they had all 150,000 UAW, only 4% of their profits from last year to give out the 6 billion dollars necessary to give a 40% raise if those workers made 100,000 per year
Ford's net income (aka profit/loss) in 2022 (FY23) was ~ -$2.1B Billion [1]. The raise would effectively add an additional $6B loss.
Think about it this way - how often do you see a brand new Big 3 car? At least in the Bay Area it's not often - it's mostly Tesla, Japanese (Toyota, Lexus, Honda, Acura, Nissan), Korean (Hyundai, Kia), and German (BMW, Mercedes, Volkswagen) automakers. And I've see a similar split both across the west and east coasts.
Eg. In 2022, the big 3 represented ~40-45% of new car sales in the US, with an average of 10% decreases in sales across the board [0]. And unlike Japanese, Korean, or German players, the Big 3 are shut out or divested out of the Asian market (eg. China, India, ASEAN) meaning no growth market in the horizon.
There isn't that much money left for the Big 3 to generate profits when enough people aren't buying their products.
According to your link the big three are 4 out of the top 5 brands being sold. Ford and GM being #2 and #3 respectively.
And by model[0], they make up 8 of the top 25, 5 of the top 10 with the F150 being the #1 selling vehicle.
Not everyone lives on the coasts. While the Japanese brands are very common here too (and I personally prefer them) my work parking lot probably has Ford trucks as the most used vehicle.
The auto industry needs to pivot to survive the next few decades for sure but some sliver of profits going to the workers is only reasonable. My hypothetical was Ford having to fund a high raise for all UAW workers when they would in reality not need to.
By market share yes. Yet even at 42% market share they are operating at a loss in 2022.
All carmakers in the US saw around a 10% drop in sales in FY23. The difference is Big 3 carmakers are very US-centric, while other Japanese/Korean/German carmakers have growth markets that they can further leverage or that can cushion bad sales in the US.
The Big 3 simply don't have a strong long term outlook nor enough money to give a raise, as they are not selling enough to break even.
By model isn't a relevant enough number simply because we need to see at the macro-level how a company is actually operating.
An additional issue with the UAW strike is EV/Battery related jobs do NOT fall under the UAW's Union [0].
At the end of the day, this is just low level politicking in a few swing states (Michigan, Pennsylvania) and one former Swing State (Ohio)
They don’t employ all 150,000 union members and a 40% raise is on average likely to be less than 40,000 but the points are still the same. Reducing the CEO’s salary to give the workers a raise of more than a few cents would require the CEO to pay hundreds of millions of dollars. So it has to come from profits or costs have to go up.
This[0] statement from Ford does align with what you are saying, I clearly misread the 150 billion number which was revenue. However they claim to have over 30 billion in cash it looks like. 2 billion of that could cover $40,000 raises for up to 50,000 employees for the next 15 years. Even splitting that by raising costs by some fraction of a percentage, taking out half a billion from the cash and then 1 billion from the profits is more mathematically sound than just saying the CEO should take a cut to cover the costs of the raise.
Comments
More my point is that the shareholders need to accept less profits.
It would cost Ford, if they had all 150,000 UAW, only 4% of their profits from last year to give out the 6 billion dollars necessary to give a 40% raise if those workers made 100,000 per year. And the CEO’s raise of 4 million is a fraction of a percentage of that.
I understand your point but the math doesn’t make sense when you talk about a few million dollars for the CEO. The 4 million dollar raise is 1% of the money necessary to give 10,000 workers 40,000. Yes the workers deserve a raise, and so that’s why they are striking. The CEO’s raise at this time is simply poor taste but not an apples to apples comparison.
If instead of a union, these companies had a codetermination model like in Germany this whole matter wouldn’t happen.
Ford's net income (aka profit/loss) in 2022 (FY23) was ~ -$2.1B Billion [1]. The raise would effectively add an additional $6B loss.
Think about it this way - how often do you see a brand new Big 3 car? At least in the Bay Area it's not often - it's mostly Tesla, Japanese (Toyota, Lexus, Honda, Acura, Nissan), Korean (Hyundai, Kia), and German (BMW, Mercedes, Volkswagen) automakers. And I've see a similar split both across the west and east coasts.
Eg. In 2022, the big 3 represented ~40-45% of new car sales in the US, with an average of 10% decreases in sales across the board [0]. And unlike Japanese, Korean, or German players, the Big 3 are shut out or divested out of the Asian market (eg. China, India, ASEAN) meaning no growth market in the horizon.
There isn't that much money left for the Big 3 to generate profits when enough people aren't buying their products.
[0] - https://www.carpro.com/blog/full-year-2022-national-auto-sal...
[1] - https://www.macrotrends.net/stocks/charts/F/ford-motor/net-i...
According to your link the big three are 4 out of the top 5 brands being sold. Ford and GM being #2 and #3 respectively.
And by model[0], they make up 8 of the top 25, 5 of the top 10 with the F150 being the #1 selling vehicle.
Not everyone lives on the coasts. While the Japanese brands are very common here too (and I personally prefer them) my work parking lot probably has Ford trucks as the most used vehicle.
The auto industry needs to pivot to survive the next few decades for sure but some sliver of profits going to the workers is only reasonable. My hypothetical was Ford having to fund a high raise for all UAW workers when they would in reality not need to.
By market share yes. Yet even at 42% market share they are operating at a loss in 2022.
All carmakers in the US saw around a 10% drop in sales in FY23. The difference is Big 3 carmakers are very US-centric, while other Japanese/Korean/German carmakers have growth markets that they can further leverage or that can cushion bad sales in the US.
The Big 3 simply don't have a strong long term outlook nor enough money to give a raise, as they are not selling enough to break even.
By model isn't a relevant enough number simply because we need to see at the macro-level how a company is actually operating.
An additional issue with the UAW strike is EV/Battery related jobs do NOT fall under the UAW's Union [0].
At the end of the day, this is just low level politicking in a few swing states (Michigan, Pennsylvania) and one former Swing State (Ohio)
[0] - https://www.politico.com/news/2023/09/13/biden-labor-ally-th...
In that case, the CEO should not have given himself a raise.
If there isn't enough money to go around, don't just give it out to yourself.
Ford’s profit in 2022 was $24 billion. $6B represents 25% of that, not 4%.
They don’t employ all 150,000 union members and a 40% raise is on average likely to be less than 40,000 but the points are still the same. Reducing the CEO’s salary to give the workers a raise of more than a few cents would require the CEO to pay hundreds of millions of dollars. So it has to come from profits or costs have to go up.
This[0] statement from Ford does align with what you are saying, I clearly misread the 150 billion number which was revenue. However they claim to have over 30 billion in cash it looks like. 2 billion of that could cover $40,000 raises for up to 50,000 employees for the next 15 years. Even splitting that by raising costs by some fraction of a percentage, taking out half a billion from the cash and then 1 billion from the profits is more mathematically sound than just saying the CEO should take a cut to cover the costs of the raise.
[0]: https://media.ford.com/content/dam/fordmedia/North%20America...