Find the latest episode of "The Uncertain Hour" here. Listen

On the Ford assembly line, new workers make less

Scott Tong Nov 11, 2014
HTML EMBED:
COPY

On the Ford assembly line, new workers make less

Scott Tong Nov 11, 2014
HTML EMBED:
COPY

In Dearborn, Michigan this morning, Ford’s brand new F-150 truck rolled off the line. What’s new? The body. It’s aluminum instead of steel. That sheds 700 pounds, or 15 percent,  from its predecessor. They call it “lightweighting.”

Ford boasts 850 new jobs on the truck line. Are they good jobs? Think of them as lightweighted, too.

New workers at Ford – as well as GM and Chrysler – start at around $18 an hour. That’s generous relative to other sectors. But put that next to $30 an hour. That’s what auto workers hired before 2007 make.

This is the new, two-tiered economy of auto workers.

“The people who are bearing the brunt of the adjustment to a more competitive world are the new hires,” says University of Michigan economist Don Grimes. “And they don’t get nearly as good benefits.”

On the shop floor, the high- and low-paid workers often do the same job.

“It would be interesting how the employees are getting along,” Grimes says. “I mean the guy working right next to you may be making a third less than you are.”

For new hires, life comes with lots of “ifs.”

You can retire well, if your investments grow. Get a raise, if the company profits. It’s all in the new contract between the Big Three and the United Auto Workers union.

It worked out well last year.

“The workers went home with lots of money in their pockets,” Kristin Dziczek at the Center for Automotive Research says. “The profit-sharing payouts at Ford were $8,800 last year. But, you know, if Ford makes no money this year, they don’t get that.”

So goes the brave new industrial world. U.S. automakers have to be lean to compete. More factory work is done by technology instead of people.

And the United Auto Workers has lost leverage. Back in the 1970s, the UAW set wages that Toyota and Honda plants in non-union states felt compelled to match.

No longer. The bottom came with the 2009 auto bankruptcies.

“A provision of those bankruptcies was that the automakers would become cost competitive with the internationals in the United States,” Dziczek says. “So that was a complete turn of the books. The internationals set the wage and benefit package for the auto industry.”

Marketplace is on a mission.

We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.

Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?

Your donation is critical to the future of public service journalism. Support our work today – for as little as $5 – and help us keep making people smarter.