In a recent interview with CNBC Overtime, Ford CEO Jim Farley voiced his concerns over the ongoing negotiations with the United Auto Workers (UAW) union, cautioning that the union's demands could potentially drive the company into bankruptcy.
The UAW's demands, as reported by The Wall Street Journal, encompass a range of requests including the reinstatement of defined benefit pensions for all workers, a four-day workweek, and a substantial raise of around 30%. Initially, the UAW had sought a 40% wage increase to align with the salary hikes received by Detroit automotive executives in recent years.
This man made $21 MILLION DOLLARS last year. https://t.co/9H3wLk5Vo0
— UAW (@UAW) September 14, 2023
Farley clarified that negotiations with the UAW have not been fruitful, even as the union's deadline approaches. He emphasized the severe financial consequences that would arise if Ford were to acquiesce to the union's demands. According to Farley, “If we signed up for the UAW's request, instead of making money and distributing $75,000 in profit sharing in the last 10 years, we would have lost $15 billion and gone bankrupt by now. The average pay would be nearly $300,000 fully fringed for a four-day workweek — per employee.” He highlighted that such a system would result in UAW workers earning up to six times more than fully tenured teachers, military members, and firefighters.
Farley expressed the dilemma faced by the company, stating, “There's no way we can be sustainable as a company. That's why we put our proposal in two weeks ago to say, ‘Look, you want us to choose bankruptcy over supporting our workers?' Here's our proposal. Let's work through this. We've heard nothing.”
In response to Farley's statements, the UAW chose to address the CEO's compensation, highlighting that he earned $21 million last year. The negotiations between Ford and the UAW continue amidst these contentious discussions over labor demands.