FORD CEO has admitted he was losing workers to Amazon as they struggled to make ends meet.
Jim Farley said he had to follow in the company founder’s footsteps and raise the minimum wage for younger employees.
AFPYounger employees had to juggle two jobs to make ends meet[/caption] GettyFord Ceo Jim Farley followed in the founder’s footsteps and increased minimum wage[/caption]Farley said in an interview at the Aspen Ideas Festival: “The older workers who’d been at the company said, ‘None of the young people want to work here. Jim, you pay $17 an hour, and they are so stressed.’”
The CEO learnt that the younger employees were forced to pick up shifts at Amazon to get by before clocking in at Ford factory.
The workers were sleeping only three or four hours a day as they juggled two jobs.
Farley then made a major change which cost the company a pretty penny.
He turned temporary workers into full-time employees, granting them higher wages, better healthcare coverage and profit-sharing checks.
Contract talks with the United Auto Workers (UAW) in 2019 laid out the transition, which allowed temporary employees to become full-time after two years of consistent employment at Ford.
Farley said: “It wasn’t easy to do. It was expensive. But I think that’s the kind of changes we need to make in our country.”
In January 1914, the company founder Henry Ford made a similar move when he doubled the minimum wage to $5 per shift.
Some economists to this day credit Ford’s decision for kickstarting the American middle class.
However, Ford’s tactic was driven by his desire to draw in steady labour and turn his employees into Ford customers.
Farley explained: “He said, ‘I’m doing this because I want my factory worker to buy my cars. If they make enough money, they’ll buy my own product.
“It’s a self-fulfilling prophecy, in a way.”
Deloitte and the Manufacturing Institute estimate that 3.8 million new manufacturing jobs will be created in the United States by 2033.
However, the younger generation has mostly avoided the field.
According to a 2023 Soter Analytics report, although Gen Z enrolment in trade schools is increasing, they are steering clear of manufacturing occupations due to poor earnings.
The average compensation for manufacturing employment in the United States is $25 per hour, or around $51,890 annually, which is less than the $66,600 average salary for Americans.
In 2023, thousands of UAW members—including 16,600 Ford employees—went on strike.
By October, they reached an agreement which not only increased salaries but also shortened the time it took for a temporary worker to transition to full-time status.
Farley emphasised that the burden of raising trade workers’ salaries is not only on Ford and referred to the walkout as “completely unnecessary” from the standpoint of management.
He said: “We’re not just going to hope it gets better.
“We have the resources, and we have the know-how, after 120 years, to solve these problems, but we need more help from others.”
It comes just hours after the Ceo has admitted that China’s advancements could push the car company into deep trouble.
As automakers compete to produce eco-friendly models, Ford is falling behind in the race.
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