UAW and Ford have reached a contract agreement! [WARNING: NO POLITICS]

[cr117]

Workers will receive a cumulative 25 percent wage increase, including 11 percent upon ratification. With the return of a cost-of-living adjustment, the overall increase is expected to equal 33 percent, the union said.

^^^ is this common core math used by UAW?

The 33% is including the COLA.

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[cr117]

Cost increases are a result of everyone. People always want more. They want do less. No matter what decisions are made, the people at the top won’t suffer. The more people demand, the more things will cost. They may feel like they won today but things will just be more expensive tomorrow. If you want a better paying job, you have to change careers.

Yeah, that’s called inflation. Something that the union workers’ salary haven’t been keeping up with over the last several years.

Besides, the $900 vehicle price increase is the estimated effect of the deal, meaning that $900 increase won’t be fully realized for another 4 years. Taking only the immediate 11% raise into account, the price of vehicles should only increase by $400 in the immediate future as a result of this new deal. Do you think that’s going to have much of an impact on sales?

 

[P52Ranch]

That's a good point. I forgot to include Texas' taxes ($0.20) and the federal excise tax ($0.18). Galveston's sales tax is 8.25%, which is pretty close to Sacramento's, so that's a wash. Thus, California pays about $1.19 at the pump, and Texas pays about $0.48. Altogether, the difference is closer to $1.44/gallon. I still think it's a valid question, though, given that clearly something in addition to taxes/fees is driving regional cost differences.

The biggest difference in fuel prices besides the taxes is the regional fuel blend requirements and supply costs. Let’s compare:
Houston TX has millions of barrels of daily refining capacity with a virtually unlimited slate of crude oil supply that becomes very competitive.
Houston TX has lower refining costs per barrel for a multitude of reasons.
California has a limited refining capacity with fewer crude oil choices. Operating a west coast refinery has much higher costs requiring more refinery margin to keep a California refinery profitable.
California requires CARB gasoline which makes it a boutique fuel that not every refinery may want to produce.
It’s much more expensive to run a gas station in California than in Houston and:
Finally, California isn’t near many corn growing states so 10 to 15% of your fuel which is ethanol get shipped by railcar from locations in the plains and Midwest states.

 

[thedrdonna]

The biggest difference in fuel prices besides the taxes is the regional fuel blend requirements and supply costs. Let’s compare:
Houston TX has millions of barrels of daily refining capacity with a virtually unlimited slate of crude oil supply that becomes very competitive.
Houston TX has lower refining costs per barrel for a multitude of reasons.
California has a limited refining capacity with fewer crude oil choices. Operating a west coast refinery has much higher costs requiring more refinery margin to keep a California refinery profitable.
California requires CARB gasoline which makes it a boutique fuel that not every refinery may want to produce.
It’s much more expensive to run a gas station in California than in Houston and:
Finally, California isn’t near many corn growing states so 10 to 15% of your fuel which is ethanol get shipped by railcar from locations in the plains and Midwest states.

If you think that Sacramento and the Bay Area don’t have refineries or corn, well, then you might not be as knowledgeable on the topic as you think.

 

[coachoates]

Yeah, that’s called inflation. Something that the union workers’ salary haven’t been keeping up with over the last several years.

Besides, the $900 vehicle price increase is the estimated effect of the deal, meaning that $900 increase won’t be fully realized for another 4 years. Taking only the immediate 11% raise into account, the price of vehicles should only increase by $400 in the immediate future as a result of this new deal. Do you think that’s going to have much of an impact on sales?

Does that take into account the $9 billion dollar impact the strike had already incurred?

however you want to justify price increases, let’s go with that. The strike didn’t help cause prices to go down and the people at the top will find a way to also increase their salaries since their dollar was indirectly devalued.

in short, strikes only increase the cost of goods and services.

It’s like my salary as a teacher, my increase (if I get one) equals my property tax value increase for the same upcoming year. My pay raise doesn’t actually get me a head. Getting a head would be adding a degree.

just stating the strike equated to a product costing more to others. So a worker who wants more, to do the same job, can get paid more. This is indirectly taxing the consumer.

Again, as a consumer I don’t have to buy a car, a Ford car, etc. so everyone do you and good luck. But the higher wages get the higher cost of living gets. If you truly want yo change your standard of living you have to change your job occupation.

i support a capitalist economy. I am not mad. There just needs to be a reality check on who is actually footing the bill. And there needs to be an acceptance on how this decision will impact the future economy on a larger scale.

 

[fallguy]

Yet Social Security recipients COLA increase just announced is 3.2%.

 

[jon]

I'm sure somebody else will have this number in the thread but just to reiterate, only 15% of a vehicle's price is labor. Taking that into account remember that in the first quarter of 2023, Ford reported a $1.3 billion profit. I'm thinking there might still be enough to go around.

What do the owners of the company deserve to earn on their investments?

 

[P52Ranch]

If you think that Sacramento and the Bay Area don’t have refineries or corn, well, then you might not be as knowledgeable on the topic as you think.

I’m not saying that refineries nor ethanol production doesn’t exist in California. I’m saying that California has to import a significant percentage of ethanol. And the California refineries have to produce region specific fuels with a much higher cost structure than a TX gulf coast refinery.

 

[swamp2]

I've not threatened my employer, or their livelihood.
When I'm ready to leave, I leave. I also give notice to not leave my employer in a bad spot. Burning bridges does not seem like a wise career choice. I've ended up working over people I've worked under before. No bad blood.

Threatened was too strong of a word. I've used, more or less, "I'm leaving if you can't provide $X in a raise" or "I have another offer for $Y but would love to stay if you can beat it". I've not burned bridges either, but rather have left multiple prior companies and managers trying to get me back long after leaving.

Are line workers the only UAW members in the negotiations?
How about the workers stacking the assembly queue with the incorrect parts that must be installed in the current vehicle?
How about the QC workers, are they part of this agreement?

Reasonable counterpoints. I never implied yes on the first question. That said, I retain my position that most quality and reliability issues are caused way up the chain in Engineering Management, Finance/Cost Control, Product Management, etc.

 

[Bronco Snow Dog]

Without reading the previous 13 pages of comments, the 25% wage increase by the end of the contract is not unreasonable. The immediate bump in pay merely raises their pay enough to compensate for where inflation has been over the past two years. The remaining year increases are in line with predicted inflation. Let's hope assembly workers become more productive and salaried workers including engineers can improve as well. Ford has wisely chosen to adjust EV investment which should keep the company free cash flow positive and will easily allow them to maintain the current dividend for shareholders.

 

[flip]

There it is. This is a huge nothing-burger, when it comes to pricing. Of course, when they raise prices by another $5k (presumably to benefit that most precious and delicate of creatures, the Shareholder), I bet there will be plenty of belly-aching about those dastardly unions.

It's not really a nothing burger because this will trickle down by a few magnitudes to consumers. Would mean nothing if ALL manufacturers had the same increase but when you're talking about Ford already having the highest cost of labor of all domestics, Tesla and imports, it puts them at a further pricing disparity in all the competitive segment categories.

Having some limited knowledge of Ford, they are one of the worst at skinning their suppliers so I don't think they can find much if any cost savings to offset the increases. They're already doing everything in their power to reduce dealer holdback and come up with punitive programs that force dealers to spend gobs of money (mobile, P&D, EV) to keep from having more margin pulled due to "compliance".

In the end, the consumer is the one that writes the paycheck for everyone from my cleanup people, UAW, Farley, Bill Ford and shareholders. Somewhere along the line the UAW was convinced they're the reason Ford is profitable and didn't mind shitting on everyone on the other side of the equation. All of this is going to go down again in another 4.5 years which will further widen the cost gap with our competitors. At some point, vehicle cost will be one of the biggest factors in purchasing decisions, especially for the smaller entry level vehicles everyone is screaming for.

 

[KTP 30]

You do have admit that a 40% raise and 32 hour work week for 40 hours of pay they were demanding was how the french say "horse pucky" ?

There is no 32 our work week for 40 hour pay!

 

[NatureMan]

It's not really a nothing burger because this will trickle down by a few magnitudes to consumers. Would mean nothing if ALL manufacturers had the same increase but when you're talking about Ford already having the highest cost of labor of all domestics, Tesla and imports, it puts them at a further pricing disparity in all the competitive segment categories.

Having some limited knowledge of Ford, they are one of the worst at skinning their suppliers so I don't think they can find much if any cost savings to offset the increases. They're already doing everything in their power to reduce dealer holdback and come up with punitive programs that force dealers to spend gobs of money (mobile, P&D, EV) to keep from having more margin pulled due to "compliance".

In the end, the consumer is the one that writes the paycheck for everyone from my cleanup people, UAW, Farley, Bill Ford and shareholders. Somewhere along the line the UAW was convinced they're the reason Ford is profitable and didn't mind shitting on everyone on the other side of the equation. All of this is going to go down again in another 4.5 years which will further widen the cost gap with our competitors. At some point, vehicle cost will be one of the biggest factors in purchasing decisions, especially for the smaller entry level vehicles everyone is screaming for.

At the bronco price point, 250 land cruiser and gx550 are competition with much better quality.

 

[ScottyC]

At the bronco price point, 250 land cruiser and gx550 are competition with much better quality.

Quality is the designers issue, not the men and women that build it. A prime example is the 1.5L Ecoboost with coolant intrusion into the cylinders - the design is bad, not the person the assembled it.

 

[shoelessjoe]

It's not really a nothing burger because this will trickle down by a few magnitudes to consumers. Would mean nothing if ALL manufacturers had the same increase but when you're talking about Ford already having the highest cost of labor of all domestics, Tesla and imports, it puts them at a further pricing disparity in all the competitive segment categories.

Having some limited knowledge of Ford, they are one of the worst at skinning their suppliers so I don't think they can find much if any cost savings to offset the increases. They're already doing everything in their power to reduce dealer holdback and come up with punitive programs that force dealers to spend gobs of money (mobile, P&D, EV) to keep from having more margin pulled due to "compliance".

In the end, the consumer is the one that writes the paycheck for everyone from my cleanup people, UAW, Farley, Bill Ford and shareholders. Somewhere along the line the UAW was convinced they're the reason Ford is profitable and didn't mind shitting on everyone on the other side of the equation. All of this is going to go down again in another 4.5 years which will further widen the cost gap with our competitors. At some point, vehicle cost will be one of the biggest factors in purchasing decisions, especially for the smaller entry level vehicles everyone is screaming for.

Doesn't the consumer write a bigger check whenever a product or service price increases? The price of a 2024 Ford Bronco 4DR Badlands Sasquatch went up almost 9k from model year 2022. That price increase happened before the UAW went on strike. The consumer always pays for it. Grocery prices went up in the past 2 or 3 years who pays for it, the consumer does. Isn't that how a business runs? When the cost of making a widget goes up I pass that cost onto the customer. Everyone is crying about the Big 3 has to make a profit isn't that what they are in business for???????

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