By on May 13, 2010

With talk of a 2010 profit breaking out at Ford’s annual shareholder’s meeting, the UAW’s criticism of the Blue Oval’s decision to restore merit pay to white-collar workers is gaining some traction. UAW boss-in-waiting Bob King laid into Ford yesterday, arguing that the union’s sacrifices entitled it to a bigger piece of Ford’s success. As a result, Nasdaq reports that Ford is in talks to restore tuition assistance to its 41k hourly, UAW-represented workers. [UPDATE: Automotive News [sub] reports the deal is done]

College tuition reimbursement was one benefit Ford had restored to salaried employees back in March. Because apparently Ford does have other priorities besides buying down its ruinous debtload. Meanwhile, as we pointed out yesterday, union-represented workers are paid considerably less than white-collar workers at GM, and the differential in pay between the two employee classes is enormous compared to the transplant competition. But is the union holding GM’s feet to the fire, even though it is sitting on vast cash reserves (courtesy of the American and Canadian taxpayers)? Of course not. The UAW’s VEBA fund owns 17.5 percent of GM, whereas it has no such stake in Ford. Once again, by not taking a government bailout, Ford has been able to gain some momentum with consumers, but faces a far less cooperative union than its domestic competition. Which, as history proves, can be a major stumbling block to long-term success.

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27 Comments on “Ford Rolling Over To Union On Tuition Assistance...”


  • avatar

    the boys at FORD are gaining traction in the popularity department. lookout GM, you are about to be relegated to second fiddle in America.

  • avatar
    littlehulkster

    Ahh, another fantastic Union bashing article. It seems that’s about all I can trust this site for anymore.

    • 0 avatar
      BDB

      Yes after all, how DARE they ask for benefits? They should be paid minimum with no benefits, and LIKE it! Then our car industry will REALLY take off!

      Union wages were never the problem with GM and Chrysler. Management and marketing beancounters designing godawful cars was the problem. You don’t think Toyota has legacy costs in Japan? They do, well minus the healthcare costs, but that’s because they have national healthcare. And with that I’m stepping away from THAT can of worms since this isn’t Thetruthabouthealthcare.com. I’m just saying Toyota did not have to pay for the healthcare of their workers, which is just a fact.

    • 0 avatar
      psarhjinian

      I’m just saying Toyota did not have to pay for the healthcare of their workers, which is just a fact.

      Not completely true. As any good libertarian will tell you, healthcare isn’t free, and both corporations and individuals pay taxes to fund those systems.

      I’m going to let the crickets chirp on the rest of this discussion, but suffice to say that I agree with both your argument.

      That said, this site isn’t union-bashing for union-bashing’s sake. They bash Management appropriately as well. And often. Rigorously. It’s what I like about TTAC: equal-opportunity cynicism. :)

    • 0 avatar
      jmo

      Union wages were never the problem with GM and Chrysler.

      The old starting wage at GM for a high school dropout was $27/hr. That’s 54k a year. You know what Google pays MIT or Stanford C/S graduates to start? 55k.

      Do you really think GM had a chance paying that kind of money?

      You know why the cars sucked? All the money that could have been spent of high quality parts and top notch interior appointments was spent on lavish union benefits.

    • 0 avatar
      psarhjinian

      You know why the cars sucked? All the money that could have been spent of high quality parts and top notch interior appointments was spent on lavish union benefits.

      Again, the problem with GM wasn’t operational cost: it was revenue. They produced cars for less than Toyota despite the supposed “exhorbitant union wages”. The cost advantage existed in 1980, but by 2000 is was long gone.

      You’re buying the line that D3 management sold for a decade or more, a clever little piece of misdirection that kept pundits, fans and the domestics’ own management from focusing on the real problem: GM et al couldn’t make a car people would pay reasonable money for even when they enjoyed a cost advantage

      Honda, Toyota, VW, Mercedes and Nissan were all more expensive producers than GM. Chrysler was more efficient still, before Daimler trainwrecked them. The UAW isn’t blameless, and they certainly suck at PR, but they’re not the scapegoat people think they are.

      The old starting wage at GM for a high school dropout was $27/hr. That’s 54k a year. You know what Google pays MIT or Stanford C/S graduates to start? 55k.

      Have you worked on a shop floor? Working for Google is a cakewalk by comparison. People want to work for Google. Hell, people will work for Google for free. No one wants to work the line. It sucks. I did it for a summer** and I’m very glad I have a white-collar job now, even if that job has me working in the evenings and has me tethered at the hip. It is a really shitty job that really hard on your body and not at all fun for the mind. What you go through to get a bachelors and a masters is nowhere near as hard, day in, day out, and it’s much more fulfilling to boot.

      It’s really shameful, how guys who take home a few million a year for losing tens or hundreds of millions of dollars can convince people who make a few tens of thousands to begrudge other people a few thousand bucks. Shouldn’t we be asking about the people making millions for doing a patently awful job?

      Or whether these “captains of industry” really deserve that kind of compensation at all? Why is a factory worker’s few thousand bucks more objectionable than a wage spread that’s been torn wide open in the last forty years?

      ** though it didn’t suck nearly as much as working in a fibreglass van body shop. Jesus, what a horrible job…

    • 0 avatar
      geeber

      Toyota directly pays the health care costs of its active workers in the United States. It has just made sure that those costs don’t become ruinous, as any well-managed company would.

  • avatar
    dwford

    Tuition assistance would be the first thing I would want back from Ford after a few years of belt tightening. How many workers will be taking advantage of that??

    • 0 avatar
      Gregg

      Many, as it includes offspring. They may not want their kids to grow up being subjected to temporary/indefinite layoffs throughout their working life.

  • avatar
    gmbuoy

    EN

    Your analysis of salaried vs hourly would be a little more accurate if you acknowledged that you had not factored in uncompensated overtime for salaried and compensated overtime for hourly.

    Dollinger, go sell Fords then.

    • 0 avatar

      have been, three this week so far. it’s absolutely sickening to think GM is about to start making money again and the execs will rake in the nice bonuses while many loyal retirees who lost their savings by holding the stock are also stripped of their pensions.

  • avatar
    50merc

    Tuition subsidy, huh? It appears Ford’s UAW workers really want another career. I can think of a very quick and simple way to expedite that career path.

    I just bought a new Ford vehicle. I like the fact that it was assembled in the US, but I’d rather it was put together by workers who saw quality performance of duties instead of UAW featherbedding as the way to preserve their jobs.

  • avatar
    Tommy Boy

    After the taxpayers bailed out the UAW, with extra-legal coercion from Comrade Obama … (see here):

    http://www.washingtonexaminer.com/politics/White-House-puts-UAW-ahead-of-property-rights-44415057.html

    http://www.washingtonexaminer.com/politics/Gangster-Government-becomes-a-long-running-series-91656284.html

    We get the UAW back to business as usual, so once again they can sink the automakers, confident that the taxpayers will end up footing the bill for their rapacious ways. NOBODY is talking about the UAW paying us back.

    The PATRIOTIC thing to do is to purchase vehicles assembled in America by non-UAW labor, and drive the UAW to extinction (which it deserves). For as long as the UAW exists it’ll continue to be a parasite feeding off of us taxpayers.

  • avatar
    Doc

    I do not think that it can be denied that union employees at the big three were paid significantly more than at the other auto companies. It would logically follow that salaried employees were paid significantly higher amounts also.

    There were many causes to the problems at the big three but it has to be acknowledged that having labor and salaries that are up to 30% higher than your competitors was not good for business.

    The long term survival of these companies is going to depend on them getting and keeping costs under control and they will have to take on big labor to do this. Either that or we will be bailing them out again.

  • avatar
    NulloModo

    I have no problem with this. All jobs have certain benefits, whether it’s the free lunch you get as a McDonald’s cashier or the great healthcare plan you get as a government employee.

    Tuition reimbursement encourages the employees to better themselves, and if it used by the actual assembly line workers, you might not have as many guys who are 20 years in and untouchable whether they work or not, as if they get degrees a lot of them will move on to jobs that are less physically demanding and more intellectually stimulating.

  • avatar
    obbop

    No problem.

    Congress will merely raise the number of H-1B visas to control the cost of educated trained labor.

    Not nearly to the the point the USA’s working-poor class has to compete for work and housing with not-quite-exactly-legal “entrants” but at least the competition is at least minutely equalized a bit when viewing modern-day economic life in the new, modern, politically correct USA where the “cult of diversity” is embraced and group-think is a wondrous think to behold.

    I feel so dirty for not being among the brainwashed “proper people” but perhaps there is hope I can rectify my enormously odious essence in time to be embraced by the warm-fuzzy horde.

    • 0 avatar
      Chicago Dude

      Oh my goodness, the dreaded H1-B! Don’t look now, but for about 15 years or so we’ve had the TN Visa program which allows an unlimited number of educated Canadians and Mexicans into this country to “steal” our jobs. They don’t even have to apply for the visa! They can just show up at the border with $50 and an offer letter!

      The sky is falling, the sky is falling!

  • avatar
    Telegraph Road

    Ford UAW–no, I’m not a member–workers have made many sacrifices to help save the company in the last two years. It’s good to see them benefit in the company’s revival.

    These views are my own and not those of my Dearborn employer.

    • 0 avatar
      Doc

      As their largess had a hand in the near destruction of the company, they should have made the sacrifices. I actually do not think that getting paid a fair market based wage is making a sacrifice at all.

  • avatar
    50merc

    Refresh my memory, please. What significant sacrifices were made by Ford’s UAW members? Veteran employees still have the same wage, don’t they? And those who lost jobs got paid pretty well to walk away.

    The not-as-big 3 and UAW are a lot like their home town, Detroit. Unwilling to admit–or stop making–the mistakes that brought them down. Life was so cushy for so long…

  • avatar
    Tommy Boy

    >>Refresh my memory, please. What significant sacrifices were made by Ford’s UAW members?

    I believe that some months ago Ford went to the UAW seeking to align its pay / benefits with those of GM / Chrysler, and the UAW told them to pound sand.

    In turn, that taxpayer bailout and Obama strong-arming insulated the GM / Chrysler UAW members from the kind of real sacrifices that a genuine Ch. 11 restructuring would have imposed.

    So yeah, what significant sacrifices?

  • avatar

    there’s a lot to like about Ford lately. I prefer a bit more upscale vehicle, so I’m “Thinkin’ Lincoln”.

  • avatar
    Z71_Silvy

    “arguing that the union’s sacrifices entitled it to a bigger piece of Ford’s success.”

    Absolutely.

  • avatar
    rudiger

    That’s quite an interesting little photo of Henry Ford’s union-busting thug Harry Bennett, Ford himself, and John Corlisle. I can’t imagine Bennett thinking very highly of Ford’s Camp Legion project to train disabled vets (which Corlisle ran).

    I’m no fan of the present-day UAW, but if there was ever a poster child for the necessity of labor unions in the US, it’s Harry Bennett.

  • avatar
    John Horner

    As Ford begins to recover, it shares a little of the upside with the people who actually build the products it sells. Oh, the horror! I must have missed the article wherein TTAC bashed Ford’s restoration of white collar merit pay increases.

    Also, you might want to read any of the numerous excellent historical treatments of Harry Bennett’s reign of terror @ Ford in the bad old days.

    History has not proven that Unions = Bad Car Companies. All of the German auto makers are heavily unionized, and Union reps sit on the board of directors there. Hyundai is heavily unionized @ home as well.

  • avatar
    jkross22

    By not taking bailouts, not many of us have a leg to stand on for critiquing what has been so far quite a turnaround, at least in the public perception. It’s that same perception that has innoculated Toyota from dramatically reduced sales. Perception is reality.

    To see the union handle Ford differently than GM or Chrysler is not surprising. Many of us have come to expect the UAW to behave in this manner.

    There’s not much hate for the white collar workers, as the perception is that they’re rewarded (for the most part, except those in very upper management and the C-suite) based on performance instead of a contract binding Ford to pay them a certain salary regardless if they’re good at their job or not.

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