'Unpatriotic' Ford Agrees Union Deal To Offshore American Jobs And Hire Low-Paid Workers

Tyler Durden's picture

As goes Ford, so goes America?

 

It appears that demand, supply, and capitalism briefly won - while 'fairness', 'patriotism', and all the other non-free-market interventionism lost - in the UAW-Ford negotiations...

Ford Motor Co. said its new four-year contract with the UAW will increase its U.S. labor costs by less than 1.5 percent annually by letting the company hire more low-cost workers and move production to factories in other countries.

The agreement - ratified by 51.3% of Ford production workers allows..

The contract allows Ford to hire an unlimited number of entry-level workers, who start at a lower wage than veterans, after a previous limit of 20 percent of its workforce as new hires.

 

In addition, Ford said it will be able to use more temporary workers, who also are paid less.

 

The agreement gives the automaker “the flexibility to leverage Ford’s global manufacturing footprint to improve cost competitiveness,” according to the statement.

 

The Ford deal, the richest of the contracts the UAW negotiated with the Detroit 3 this fall, promises $9 billion in factory upgrades and expansions that create or keep 8,500 jobs in the U.S. The pact provides across-the-board raises and $10,000 in bonuses upon ratification.

So to translate - union workers just agreed a contract which "creates or keeps" some jobs - sounds familiar; provides some short-term bonuses... but enables Ford to offshore American production and rotate from high-paid to low-paid jobs.

Still a job is a job is a job right? Even if it pays drastically less?

Does not sound like President Obama or Hillary will be happy about this kind of non-patriotism?

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insanelysane's picture

No surprise from Ford.  Ford has colluded with Toyota in trucks.  Ford dropped their line of small trucks such as the Ranger and Explorer Sport Trac and Toyota no longer competes in the larger truck category.  Completely dropped the lines even though they sell a line of small work vans.  Makes absolutely no sense if their was true competition going on.

J S Bach's picture

What would old man Ford think of what his progeny have done to his company?  He instituted the $5 a day wage back in 1915 thinking about how it would benefit his fellow countrymen-workers.  Today, they piss on them as they slowly erode any loyalty to the U.S.  And what would the author of "The International Jew - The World's Foremost Problem" have thought about the man steering his company's ship, Mark Fields (Finkelman)?  Hmmmmm.

margincall575's picture
margincall575 (not verified) J S Bach Nov 30, 2015 11:40 AM

Old man Ford put his engines in Panzers i believe. For sure many Nazi trucks. A Facist like no other so doubt hed flinch. You dont believe me watch one of the greatest documentary i have ever seen

http://themillenniumreport.com/2015/11/cia-company-the-real-plotters-beh...

 

Prescott Bush, Henry Ford Countless others. All played both sides.  Dont for a minute think they gave a crap about anyone's well being

J S Bach's picture

I suppose it would have been better if more Ford engines were put into Communist Red Army vehicles, eh?  Henry Ford was an honorable man who valued the truth, sir... and he wasn't afraid to "offend" anyone in his efforts to disseminate it.  He realized who the enemy of all mankind was and is... and he WAS loyal to his American workforce, whether you wish to believe it or not.

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) J S Bach Nov 30, 2015 12:30 PM

1: Like it or not, wages in the U.S. will continue to go down becasue the U.S. CONSUMER refuses to only buy made in the U.S.A.  The U.S. consumer will buy what he sees as the best value - which normally means cheapest but will function as they want.  U.S. companies either lower wages to compete, move jobs overseas to compete, or go out of business.

2: If the U.S. consumer does only buy made in the U.S. his standard of living will go down becasue he will have to pay more for products, having less money to spend on other items.

3: A BIG part of the problem is also government regulation.  Government strangles businesses with unnecessary taxes and regulations in order to keep crony capitalism functioning.  If the government regulation burden was less, companies would be more likely to stay in the U.S. becasue costs would be lower - they could compete.

bmr22's picture

Hard to buy made in the USA when we hardly make anything anymore. I fear that ship has already sailed about the time Ross Perot was telling us about that giant sucking sound.

OregonGrown's picture

EXACTLY.... besides rules and regs, bombs and missles.... what in the hell does USA make anymore?

Victorio's picture

Yes, being an american company that built equpment for hitler and the nazi's makes them decidedly unpatriotic and they contiue to this day.  The real fucking bitch is I drive an old ford. Fuck. 

 

https://www.youtube.com/watch?v=U1Qt6a-vaNM

AMPALANCE's picture

We make pretty good socialist in our subsidized higher educational institutions, who magically avoid the historic failures of socialism throughout history.

Quantitative Seizing's picture

Not aimed at you, LSD:

 

What???  The consumer is the market and in no way the problem.  The market has every right and, I would argue, every obligation to select the best product that meets its needs.

 

If our government has entered into trade agreements with foreign suppliers of goods/services/labor that are artificially supported or there is a significant advantage due to wage arbitrage then it is the government’s fault for setting up a market that is unfavorable to domestic production and labor.

 

The economy of a country should work for the people of the country rather than the bonuses of the few C-level execs running large businesses and the government.

 

Until thinking citizens reengage in governing our country, the ego-driven prima donnas we elect and the monied elite who influence them will continue to act in their own best interest which is very different than our best interest.

 

 

NihilistZero's picture

The consumer is the market and in no way the problem.  The market has every right and, I would argue, every obligation to select the best product that meets its needs.

What fucking market???  In the absence of our Centrally-Planned-To-Fuck-The-American-Worker system the best products would be provided by Americans!

Labor is such a low percentage of the cost of manufacturing in an industrialized free market nation that an EXTREMELY modest import tarrif would make input costs on goods a wash.  Given that leveled playing field me thinks an American manufacturing worker living in flyover country who could work for a minimal wage yet still afford a standard of living would beat out Chinese slave labor every fucking time.

We are not given the option of selecting the "best product" nor are those entrepreneurs who truly wish to provide it given the option to in our centrally planned economic nightmare.

To paraphrase Jim Mora...  Markets?!?!  Don't talk about Markets!!! Are you kidding me??? Markets?!?!

SixIsNinE's picture

 Anthony Sutton broke a lot of the subterfuge, spying, and "playing both sides" story ....

i think this is the interview that talks about how US tech know how was passed to the Soviets ...

https://youtu.be/j3vZNSAi-QM 

yes, no doubt there were infiltrator traitors within Ford Motor Co.

 

QQQBall's picture

$10,000 upfront - buying vote? Pay me a little now and a whole lot less later. Dumping older union workers will increase as new-hires work for less and if they act up, more jobs to Moterrey, Mex

Rusty Shorts's picture

As a side note - 2003 was the last year GM Trucks were trademarked with "CHEVROLET"

adr's picture

Henry Ford's company died in 1956 when his sons and other family members decided to fuck the old man and take his company public to sell it off to the Jews his father so hated.

The man died knowing the lofty goals he had for the nation he lived in were crushed by the International Jew. A stern warning for anyone who dares to rise against the empire.

Post 1956 the real world economy stagnated and died. The only path to wealth was through Wall Street and only if "they" allow it.

Herodotus's picture

Your point could be better made if you got the history a little more accurate.  Henry Ford had only 1 child, Edsel.  Edsel died (1943) before the old man did (1947).   I think that you are referring to Edsel's sons.....Henry Ford II, William Clay Ford, Benson Ford.  So it was the old man's grandson, Henry Ford II, who was in charge when the company went public in 1956.  Also, the family members controlled a special class of the stock that always gave them 40% of the voting power, a permanent controlling interest in the company.   This feature helped to keep the ravenous Jews at bay as intended.  To the best of my knowledge, the family still decides who is going to run the company, although, as you infer, as long as the company remains in debt, they are somewhat at the mercy of moneylenders. 

_ConanTheLibertarian_'s picture

Ironic that the Ford Edsel failed. Maybe don't name cars after your dead children.

silverer's picture

It was said that the grille shape was "feminine".  Like a chrome pussy.  Check out images of the 1957 Edsel, see what you think.

Recidivism's picture
Recidivism (not verified) silverer Nov 30, 2015 5:58 PM

When you said "Like a chrome pussy" I thought it would be triangular. I think it looks more like a cunt, if you see what I mean?

KnuckleDragger-X's picture

Henry Ford was practicing enlightened self-interest, which, as anybody with an MBA or economics degree will tell you is evil. What is truly amazing is that none of these people can figure out why unemployed people, who are barely afloat, isn't buying more useless shit that is being imported from the third world by rent seeking cronies.....

Reichstag Fire Dept.'s picture

The US$5.oo/day wage was to make workers able to afford Ford automobiles as a means to popularize the Ford automobile.

Imagine...workers able to afford the products they make?!

Old man Ford knew he would be getting a lot of that money back though, didn't he?! ...in the form of sold automobiles to his workers.

Also, old man Ford knew that the more cars he sold, the more he could lower his production costs. The more he could lower his production costs the more he could lower prices, the more he could lower his prices the more cars he could sell. The more cars he could sell the more he could lower his production costs, et cetera.

He knew he corner the automobile market by being more productive and more competitive...selling more for less...what a novel concept!!

Back then, wages were paid out of the "wage fund", this was the amount of money paid to the worker based on the value of their work budgeted into the cost of production...figured on the "credit" side of the ledger. (Remember, the dollar was backed by gold.)

Now, wages are paid out of the payroll line of "credit" which is a debt of the company to be repayed. This debt has to compete with all of the other forms of debt incurred by a company including Interest, Taxes, Depriciation, Ammortization or "EBITDA". The companies earning are veiwed on the credit side of the ledger while wages are now a debt, disconnected for old man Ford's 19th century wage model.

Herein lays your wage compression. Wages go down in relation to corporate earnings because wages have to compete with the other forms of debt a corporation incurrs. Anybody that cannot attach their wage directly to corporate earnings (like a bonus paid ahead of EBITDA) does not make a "first world" wage.

I know my explaination is simplistic and somewhat innacurate but you need to understand this:

I'm a dumb fucking heavy equipment operator working at a gold mine in Arctic Canada.

So, this is hope? I'm not and economist nor accountant nor Wall Street financier however I DID take a run a federal office in a forgotten part of this country...to no avail, I was ignored. BUT!!! If a dumb cunt like me can figure this much of the economic problem out for himself...just maybe there is a chance in this world?

Dumb cunts that know how many beans make three...UNITE!!! 

free_as_in_beer's picture

Paying wages from a line vs a bank balance is based on cashflow, and not profitablity.

I would say EBITDA seeks to normalize profits from capex, cashflow, etc type of items.

A retailer that gets paid at the POS, vs a law firm that gets paid net45+ on a quartly invoice have very differnt cashflow needs.

Reichstag Fire Dept.'s picture

That's exactly at the heart of my (greater) point.

Employees were paid weekly with a gold backed dollar and after the commerical invoice was paid by the retailer on delivery, which was almost immediatly. No debt incurred.

The retailer could get paid right away too, if he sold that Ford invoice for a car on to a capitalist at a discount. The capitalist incurred the risk of waiting the 90 days to get paid and his profit was the amount of the discount.

This was a 19th century style of business transaction that ended by the end of WWI. We don't conduct business like this anymore. There was no way to enslave peoplle with debt under a system of "Real Bills" payment in gold.

Reichstag Fire Dept.'s picture

Furthermore...it was no mistake that that one of the outcomes of WWI was that we don't conduct business with these "Real Bills" any more. We now use a debt based financial instrument called money.

Reichstag Fire Dept.'s picture

Let's compare Ford wages then with what Ford wages "should be" today if the wages were relative to the cost of the vehicles like 1915, shall we??

With a $5.oo/day wage it took 83 days of work to buy a new Ford Model T. (Average price of the entire Ford Model T line of cars.) To accomplish this today Ford needs to pay workers Cdn$126,100.oo/year based on a 40 hour work week. Below is the breakdown per day for comparison.

 

1915 Ford Model T = $415.oo
1915 Ford Wage    = $5.oo/day

2015 Average Total Model Line = Cdn$40,240
2015 Total Model Line/83 days = Cdn$485.oo/day

 

Reichstag Fire Dept.'s picture
Original Model T Ford Prices by Model and Year
Year:   Touring   Runabout
1912
  $690  $590
1913  $600  $525
1914
  $490  $440
1915
  $440  $390 Notice anything about the price over time?
RiverRoad's picture

Makes a lot of sense in the NWO.  This is Germany's MO re the refugee/serfs:  Bring in lots of low-paid toilet scrubbers to keep wages low and wage inflation down for decades....

cornflakesdisease's picture

Those van trucks are garbage too.  Made in Mexico and they fall apart.  My brother's elevator repair company bought three of them and sold them off after three years; upolstery comes off, transmission problems, gas milegae was not as stated, and just poor quality with endless repairs.

Apolitical Blues's picture

Not at all. The need to trim costs never ceases, FORD is actually to be commended for keeping the jobs in the country. Entry level (apprenticeship) wages are, as a labor guy myself, realistic. Senior, experienced employees carry the corporate intelligence that is always being tapped for feedback, you won't do that with someone you hired last month. I certainly do not see this as some sort of unpatriotic act.

 

BullyBearish's picture

Where's the part about UAW executive asset accounts mysteriously jumping over 100% in Cayman Islands Banks...

Normalcy Bias's picture

Don't fret 'Murica! In 10 years when the U.S. has been "fundamentally transformed" into a third world hellhole and most of the population is desperate to work (for food), these manufacturing jobs will return!

krispkritter's picture

Fucking Old Retirees Daily

Frantically Outsourcing Rest (of) Detroit

two hoots's picture

 

Young American workers are screwed.  The senior workers (Ford, et al)  greed bandwagon will sell out the future for pleasure today, as in, ‘my world ends when I end so I’m taking all I can get, fuck off’.

 

Kickaha's picture

Your post highlights a structural problem with labor laws in the USA.  Unions are run by high-seniority members.  Union contracts, first and foremost, take care of the high-seniority workers.  If a contract contains large wage increases that cause the company to turn increasingly to automation, it is the low-seniority workers who suffer the layoffs.  The Union need not concern itself with those short-timers, who lack much in the way of internal union political clout.

Nowadays, all unions give lip service, and nothing more, to the concept of "solidarity".  If it takes new and much lower wage levels for new hires to fund wage increases for the high-seniority members, then piss on the new workers.  While a lot of the high-seniority guys have been promoted into positions requiring a lot of skill and experience, many of them are still laborers, and they will be working side-by-side with new hires or temps making a third of what the old guys are making.

Union politics dictate that wages must go up, up, up for the high seniority members.  This only works intermediate-term if the company can replace workers with machines and increase productivity enough to fund the higher wages.  Note that the amount of capital investment to which the company commits itself in the labor contract has become a major issue to be addressed in the collective bargaining agreement.

Long-term I don't know where this ends.  Maybe ten guys making $250,000/yr. with full fringes running a fully automated plant.  I just can't figure out who is going to be buying the robot-assembled cars, absent a complete re-engineering of how our society handles redistribution of income.  Just as a system designed to manage an agrarian economy needed to be overhauled to manage a manufacturing econony, we need another overhaul to manage an economy where robots are doing more and more of the the "good jobs" that previously existed in manufacturing.  

Even professional segments of the economy, like doctors, lawyers, engineers, and accountants, are already suffering losses of revenue due to the ready availability of previously guild-private information on the internet, and there already is much talk about utilizing A.I. programs for routine matters in those professions in the near future.

The animosity directed to outsourcing of jobs is rational only in the context of seeking to sway public opinion in favor of protectionist legislation to preserve high wages at home on a purely temporary basis.  Meanwhile, overseas, even the low cost workers are being replaced by machines.  Wake up.  You are living in the Age of Robots.  The only issue of import is how society will divvy up their production.  The enrichment of the .01%  has happened not only due to the financialization of things and asset bubbles, but also because the .01% own most of the capital in an era where the importance of labor diminishes day-by-day.

 

Flagit's picture

Did you see the movie The Animatrix?

Interesting segment on how AI eventually replaces the workforce.

Kickaha's picture

I was unaware that The Animatrix existed.  It looks interesting.  While composing my original post, my thoughts wandered briefly in to the Dune series and the Butlerian Jihad.  

Normalcy Bias's picture

You just summed up the Baby Boomer generation, in a nutshell.

SillySalesmanQuestion's picture

+1 for beating me to it krisp. Gee, they saved 8500 jobs...wow.

graneros's picture

10 years man are you ever optimistic. We have already been "fundamentally transformed."

saveUSsavers's picture

bought Ford Credit bonds today 4.05%

Skateboarder's picture

Instead of wheels, each car will ship with a low-paid worker to run the car around like in The Flintstones.

Innovation, baby!

css1971's picture

A  free chauffeur with every new car.

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) css1971 Nov 30, 2015 1:02 PM

Just keep the chastity belts locked tight around your wife and kids (boys and girls).

Agent P's picture

Ford construyó duro

youngman's picture

Welcome to the world of business......

saveUSsavers's picture

Bullish. They still are hiring in US, albeit lower tier wages and have 3 of best-selling brands there are. F-150, Escape, Fusion. and a 1% repossession rate, lowest in their history and NO GOV BAILOUT.

TradingTroll's picture

NO. Welcome to the world of crony capitalism  where the workers, the people who actually  built  these damn  businesses,  don't get a cut of the deal when automation  or off shoring is brought in.I remember  high school  in the 80's. We were supposed to have  shorter  work  weeks due to computers. Instead the politicians  sold out the people who elected them. This is not capitalism.