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Ford Chief Executive Jim Farley gained knowledge from veteran workers
that certain younger employees at the automobile company were working rotations at
Amazon
To cover his expenses, he mentioned during the Aspen Ideas Festival. Farley referenced how founder Henry Ford increased factory pay to $5 per day in 1914, transforming part-time workers into permanent staff. Previously, young individuals avoided manufacturing roles because of insufficient compensation.
Certain economists attribute the beginning of the American middle class during the 20th century to automobile manufacturer Henry Ford, who increased factory pay in January 1914.
to $5
more than twice the typical salary for an eight-hour workday.
Over a century later, confronting the situation where numerous workers “are just making ends meet,” Ford Chief Executive Jim Farley stated he drew inspiration from the original founder’s approach.
The automobile manufacturer’s CEO acknowledged the necessity for transformation within his company after speaking with long-time employees during labor agreement discussions, discovering that younger Ford workers were holding down several jobs and experiencing insufficient rest because of meager pay, according to Farley.
interview
at the Aspen Ideas Festival on Friday with journalist and biographer Walter Isaacson
“The senior employees who had worked at the company mentioned, ‘None of the younger individuals wish to stay here. Jim, you’re offering $17 per hour, yet they experience a lot of pressure,’” Farley stated.
Farley discovered that some employees also had roles at Amazon, working eight hours there prior to starting a seven-hour shift at Ford, with only three or four hours of sleep. Because of this, the company converted temporary staff into permanent workers, qualifying them for increased pay, profit-sharing payments, and improved medical benefits. The change was detailed in
2019 contract negotiations
in partnership with the United Auto Workers (UAW), where temporary employees can transition to full-time positions after two years of uninterrupted work at Ford.
It wasn’t simple,” Farley remarked. “It came at a high cost. However, I believe these are the kinds of adjustments our nation must implement.
Henry Ford’s choice to increase factory pay rates in 1914 wasn’t driven by generosity, but instead aimed at securing a reliable labor force, along with enabling his employees to purchase Ford vehicles.
He stated, ‘I’m doing this because I want my factory employees to purchase my vehicles. If they earn sufficient income, they’ll end up buying my products,’” Farley mentioned. “In a sense, it’s a self-fulfilling prophecy.
Difficulty drawing in younger skilled laborers
Farley, who supports increasing U.S. manufacturing efficiency to strengthen the vital economy, has pushed for young employees to gain solid vocational training.
Our governments must take trade schools and vocational training very seriously,” he stated. “If you look at Germany, each of our factory workers has an apprentice beginning in middle school. Each of these positions involves someone who has been trained over the course of eight years.
Despite the U.S. seeing
3.8 million newly created positions in manufacturing
3.8 million additional roles within the manufacturing sector
3.8 million fresh employment opportunities in production industries
3.8 million new job openings in factory settings
3.8 million emerging careers in the manufacturing field
by 2033, according to
Deloitte
and the Manufacturing Institute, the younger generation of employees have mostly moved away from this profession. Gen Z students attending vocational colleges are
on the rise
but the latest generation joining the workforce is mostly
eschewing factory jobs
, pointing to low pay, as per a 2023 Soter Analytics report. The average for U.S. manufacturing positions within the country is
$25-per-hour wage
–approximately $51,890 annually — not meeting the
average American salary
of $66,600.
American automakers such as Ford might be working to attract younger workers into manufacturing roles, yet they remain vulnerable to employee complaints about pay. In 2023, tens of thousands of UAW members, including 16,600 Ford staff, went on strike prior to
reaching a contract deal
In October of that year, which not only raised salaries but also shortened the duration required for a temporary employee to transition into a permanent position.
Farley described the strike as “entirely avoidable” from the company’s point of view and emphasized that the responsibility for increasing pay for skilled tradespeople doesn’t solely lie with Ford.
We’re not simply waiting for things to improve,” he stated. “We possess the necessary resources and expertise, having spent 120 years tackling these issues, yet we require additional support from others.
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