Ford Australia wants pay freeze and two-tier wages

[DanielXR8]

Interesting story on GoAuto this morning.

Mixed feelings on this one. On the one hand Ford faces a very competitive and tough market at the moment. On the other Ford needs employee buy in on such things as raising the quality and consistency of the cars it builds, if it is to live down some of the woes of BA Falcon and the Territory. Both of which have undoubtly pushed past Ford customers away from the brand.

Tough call for Marin Burela.

Anyway here is the story:

Blue-collar pay freeze looms as Ford Oz and union debate new enterprise agreement

By JAMES STANFORD 10 July 2009

FORD Australia is calling for its factory workers to accept a wage freeze and adopt a new two-tier pay structure as it aims to slash costs in a bid to return to profitability this year.

Documents obtained by GoAuto reveal the company is seeking the wage concession as part of new enterprise agreement currently being negotiated with representatives of the Federation of the Vehicle Industry Unions.

The Ford Australia log of claims made during the opening round of negotiations in June includes the proposed pay freeze as well as a call for a two-tier wage system that would see new employees paid less than existing workers.

At this stage, there is no timeframe for the pay freeze, which would depend on the length of the agreement.

The Ford log of claims also includes a call for allowances to be frozen at 2006 rates and some to be abolished when a worker is affected by ‘market initiated change’, ‘employee initiated change’ and ‘forced transfers’.

There is also a proposal for removal of sick leave payouts and annual bonuses.

Ford Australia president Marin Burela has stated the company is determined to keep its costs in check so the company turn around its $274 million loss of 2008.

Left: Marin Burela.

After announcing another price increase for its Falcon range from July, Ford Australia is looking to trim back supplier costs as well as cut wage costs. Mr Burela said the current economic climate meant it was not possible to justify salary increases for either Ford's blue-collar or white-collar employees, who like their counterparts at GM Holden remain under a pay freeze.

“I have been very consistent with this. We have had a management wage freeze for a long time and rightly so,” he said.

“We have put down on the table the fact that we don’t think this is the right time for us to be making demands on ourselves as a company and it terms of a group of people of growing our cost base.”

Mr Burela said the meetings between Ford and union representatives had been productive and he hoped the negotiations would conclude within the next month.

“That is not an easy conversation to have - obviously that is very difficult - but it is being met by professionalism and maturity at every level of the trade union movement,” he said.

“Where that will lead us over the next month, only time will tell.”

Mr Burela said he felt the union representatives understood the company’s position.

“There wasn’t the emotion that you might think because people genuinely understand the severity of the issues we have confronting us,” he said.

Mr Burela would not discuss the details of the various claims, but said he hoped the agreement would cover the next 18 months to two years.

“We clearly spoke about a number of things; some of them were centred around the level of different financial impact on things, flexibility, we spoke about the areas that we don’t think have worked for us over the last two or three years,” he said.

The union federation is considering the pay freeze, but its initial log of claims included an annual five per cent wage increase. It has rejected the idea of a two-tier pay structure and maintains there is no way it will accept that aspect of the proposal.

A union source told GoAuto it was also looking to improve conditions for workers subjected to down-days at Ford’s plants, suggesting they be paid 90 per cent of their normal rate on those days.

“We are not insensitive to market conditions that are facing the industry at the moment,” the source said. “We think there is a capacity to make some improvements in terms of funding affected employees.”

The negotiations are taking place after a wave of job cuts including a major restructure at the end of last year which affected blue and white-collar workers at Ford’s Victorian operations.

Mr Burela said while requesting a wage freeze and other changes was not easy, the company had already made some tough calls that prevented the workforce being subjected to many down days.

“We took some very hard decisions in 2008 when we restructured the company. I was probably the least liked person in Australia at that time... I was the villain, but we did it the right way,” he said.

“If you look at our position in 2009 we have not had to react like our competitors - in terms of massive production down days we have our production set for the whole year.”

Mr Burela said Ford Australia was committed to returning to the black and said it aimed to do so soon.

“We are very focussed on finishing this year at break even or better - that is our aim,” he said.

“Our objective is to continue to improve our financial performance and we are on the road to doing that; 2010 will be a very challenging year and our objective is to maintain that level of stability.”

Mr Burela said Ford Australia had already sold the next two months' supply of locally produced vehicles to dealers, which is a very different scenario to the days of excess stock.

“Our order bank for July is very healthy; in fact our production is sold for July, for August and we are taking orders for September,” he said.

“Six or seven months ago you would have seen us holding, I don’t know, 8000 to 9000 vehicles on the grass with our imports and local production. Now, we have nothing on the grass,” he said.

As part of its moves to improve the bottom line, Ford Australia increased the pricing of its Falcon sedan, ute and wagon range by between $1000 and $1500 from July 1.

Mr Burela dismissed any suggestion the move was made due to the full order bank, stating that the increases was simply a reflection of the rising cost of production.

He said exchange rates did play a role, but added that the price of raw materials including steel and plastic had increased.

“There is the exchange, but also the commodities - the ups and downs of commodity prices that you can’t control,” he said.

[Wretched]

I see this as fair.
A lot of organisations have adopted these polices years ago.
If this is what Ford OZ needs to do to survive then so be it.
Australian manufacturing needs to move into the 21st century if it is to survive, the sooner unions learn this the better.

[flappist]

This is going to be fun.

/me sits and waits for the usual suspects.......

[cob115]

definatly some thing that has to be taken into acount,if ford any auto make wants to survive in Australia,i know its going to suck lemons for the workers but times arent the best at the moment and haveing a job at ford would be better than having non

[Gobes32]

It is a moral conundrum in regards to the two different wages, on one hand, current employees should not care because they are already employed, but what of the next generation of employees? Should they be on less pay for the same job because they started there after you?

[RG]

Originally Posted by Gobes32

It is a moral conundrum in regards to the two different wages, on one hand, current employees should not care because they are already employed, but what of the next generation of employees? Should they be on less pay for the same job because they started there after you?

Personally I'd prefer a job with less pay than no job with no pay.

[Gobes32]

Originally Posted by RG

Personally I'd prefer a job with less pay than no job with no pay.

I agree, but if the employee's accept two tier wages, sure it won't affect them, but what about the next batch of employee's Ford hire?

[RG]

Originally Posted by Gobes32

I agree, but if the employee's accept two tier wages, sure it won't affect them, but what about the next batch of employee's Ford hire?

Well if they don't do it they won't be hiring will they.

[MO]

MO,pulls up comfy chair and watches with flappist and no doubt 4vman will be along soon.hehehe

[GK]

Originally Posted by MO

MO,pulls up comfy chair and watches with flappist and no doubt 4vman will be along soon.hehehe

Classic!

However, he was already here in post #3 MO! LOL!

True he wasn't controversial in that post!

As I scrolled down, I saw the massive interest this thread has generated! LOL!

GK

[flappist]

Originally Posted by GK

Classic!

However, he was already here in post #3 MO! LOL!

True he wasn't controversial in that post!

As I scrolled down, I saw the massive interest this thread has generated! LOL!

GK

MO actually knew that which is why he said he was WITH me and not WAITING for me. He, like me, knew the usual suspects would turn up and then go off like pork chops without actually comprehending almost anything already written.

[GK]

Originally Posted by flappist

MO actually knew that which is why he said he was WITH me and not WAITING for me. He, like me, knew the usual suspects would turn up and then go off like pork chops without actually comprehending almost anything already written.

I just went back and re-read MO's post. He did indeed saw he was waiting WITH you.

I'd better go into the dining room, the pork has finished cooking! LOL!

GK

[gtfpv]

what a great idea. next time i pay my electricity , council , phone and grocery and water bills , i'll offer them 90% of the price too, and when new people moving into the area might want to see if they can pay less .
ford has increased the car prices . that covers it . i would say they are already minimally staffed . otherwise they'd be offering redundancies .
if they are already minimally staffed , that means they are running asefficiantly as they can .

[Gobes32]

I just think you need to think of the employment world you leave your children.... Would you be happy if your son was on 25% less pay than his other workmates just because he was born a couple of years later than them?

[gtfpv]

Originally Posted by Gobes32

I just think you need to think of the employment world you leave your children.... Would you be happy if your son was on 25% less pay than his other workmates just because he was born a couple of years later than them?

exactly, these guys are still going to pay the same as everyone else for living .

[Wally]

Seems a long way from Henry Ford's $5/8hour day innovation.

[4Vman]

Ford arent making a profit yet are they?
Oh well, it doesn't matter, just give them all pay rises anyway, then watch the price of cars go up even more, then watch Ford loose sales because they're too expensive...
From there its easy to work out the result.

[Gobes32]

Originally Posted by 4Vman

Ford arent making a profit yet are they?
Oh well, it doesn't matter, just give them all pay rises anyway, then watch the price of cars go up even more, then watch Ford loose sales because they're too expensive...
From there its easy to work out the result.

I understand what you are saying mate and as a union member I will be happy to take a wage freeze, I am more worried about supporting my employer than trying to screw an extra $30 a week out of them. But my moral issue is that you are effectively screwing over the next generation of workers by denying them equal pay. If you are worth $20 an hour to do a set task, then the next person hired, if able to do the same job competently, should be entitled to the same pay also.

[fte50]

Originally Posted by Gobes32

I understand what you are saying mate and as a union member I will be happy to take a wage freeze, I am more worried about supporting my employer than trying to screw an extra $30 a week out of them. But my moral issue is that you are effectively screwing over the next generation of workers by denying them equal pay. If you are worth $20 an hour to do a set task, then the next person hired, if able to do the same job competently, should be entitled to the same pay also.

Here Here.
It seems modern man has forgotten the moral principals our forefathers fought so hard for, and the main one was 'Equality'.
An employee has a vested interest to protect/honor their employer TO A DEGREE, however should they be punished for the wrong doing of management who have clearly failed to predict/respond to changing markets, products, technologies etc?. After all, it is their job (managements) that should bear the responsibility for all. Its the decisions they make which steers the company in either direction.
Sure, they take a wage freeze, though its slightly different being frozen on say $50k versus $125+k.
Remember, no major gave you a pay rise coz they liked you - it was faught for. out: out: out:

[Bossxr8]

Originally Posted by fte50

Here Here.
It seems modern man has forgotten the moral principals our forefathers fought so hard for, and the main one was 'Equality'.
An employee has a vested interest to protect/honor their employer TO A DEGREE, however should they be punished for the wrong doing of management who have clearly failed to predict/respond to changing markets, products, technologies etc?. After all, it is their job (managements) that should bear the responsibility for all. Its the decisions they make which steers the company in either direction.
Sure, they take a wage freeze, though its slightly different being frozen on say $50k versus $125+k.
Remember, no major gave you a pay rise coz they liked you - it was faught for. out: out: out:

Thats one thing that troubles me about Ford. The management, product planners and sales and marketing teams are never held responsible when they make mistakes ie. the failure of the FG Falcon launch. It took Marin's appointment to slowly start to turn it around, but when the FG tanked early on it was the employees on the plant floor that suffered and got laid off, while those directly responsible for failing to read the market, and the pathetic job they did in selling and advertising the product went untouched. The people who make the wrong calls are the ones who should be held responsible for their mistakes. Tom Gorman was never held responsible for his job of totally mis-managing the company and nearly sending it to the wall, if anything he was actually rewarded by keeping his job for what I believe was the longest time period that FoA has ever had the one president for. He wasn't even sacked for the poor job he did, he left on his own accord, although he may have been pushed, not that the company would ever admit that.

Bill Osbourne tried but he was handed the poison chalice from Tom Gorman and couldn't clean up the mess. At least Marin has that one thing Geoff Polites always talked about, passion. Its amazing what happens when you have someone in charge who has a real passion for the place. Hopefully Detroit will learn that next time they appoint a president for FoA.

[b0son]

Originally Posted by Bossxr8

when the FG tanked early on it was the employees on the plant floor that suffered and got laid off

Thats the obvious downside of being at the bottom of the food chain. The solution to that would be to have gotten different qualifications etc and choose a different career path.

while those directly responsible for failing to read the market

Given that the FG was in development for YEARS before release, when it became clear the market was becoming unfavourable for large cars, what would you expect Ford to do? Turn it into a hybrid 3mths before launch?

If I was able to read the market that many years in advance, I most certainly wouldnt be working for Ford would I? I'd be in oil futures....

[gtfpv]

i've been down the path of taking a pay freeze before of 4% for a multi national big company, and my colleuges agreed to a once off extra 75 hours per year for free,( for onr year only ) and guess what , never ever ever got it back. i dont agree with pay cuts for managers or employees . .
FORD increased it's prices to cover some losses . they can cut hours and/or overtime for employees, not pay rates . costs of living dont go down . big businesses need to realise this .

[SB076]

Dont know what the right answer is in regards to this - obviously its difficult to pay more and still remain competitive however I would also argue that there are additonal costs over and above a workers take home pay that makes it difficult to compete.

Was talking to an accountant the other day and he suggested that accountancy firms are starting took at utilize overseas labor for some of the more mundine/simple tasks. He gave an example that for $25,000 a year (all inclusive) his firm could employ a fully qualified student from India to do some of the simple tasks - obviously there are still checks in place back here but ultimately once they are satisfied with the quality of work they will remove those and send more work off shore.

[GQ_Smooth]

I've yet to be involved in wage negotiations where both parties are honest with each other. As a result it's difficult to have an educated opinion as very few of us will know the true facts.

Can you imagine what these discussion would be like at GM USA after the GFC is over, with the unions having a 17% stake in the company pushing a pay increase? This has not worked in Europe (France) and ended up in the Unions having to sell their share of the busines (from memory for a financial loss).

[Gobes32]

I think most people seen the wage freeze coming, however, i still do not think it is fair for two people doing the same job to be worth different amounts purely based on the time they started at Ford's.

[mik]

[QUOTE=Gobes32]I think most people seen the wage freeze coming, however, i still do not think it is fair for two people doing the same job to be worth different amounts purely based on the time they started at Ford's.[/QUOTE
that could be called seniority, we would like to assume that one day down the track when things are all hunky dory pay rises could be on the menu again.

[Racecraft]

[QUOTE=mik]

Originally Posted by Gobes32

I think most people seen the wage freeze coming, however, i still do not think it is fair for two people doing the same job to be worth different amounts purely based on the time they started at Ford's.[/QUOTE
that could be called seniority, we would like to assume that one day down the track when things are all hunky dory pay rises could be on the menu again.

I'd bet the new guys get to keep the job and the 'overpaid' existing employees get shown the door.

[Ohio XB]

That raises an interesting point. When people speak about the old timers leaving, yeah, I think some have stayed too long. For others that have been here a long time, but not over stayed, when those people leave they take an amazing amount of experience and knowledge with them. There are tricks to fixing certain things, tricks for figuring out where panel damage is occuring, and many other "tricks of the trade" that walk out that door with them.

When we've had a couple hundred people leave at once, seasoned people, there is an immediate affect on quality. Issues take longer to remedy, repairs take longer, a broken down machine may have no one to fix it because the guy they automatically called on has now retired, and nobody else has the same familiarity with that equipment.

An Engineer with 25 years experience at Ford may have been let go and a guy with 3 years put in his place. Not only does he not know what he is doing, he also doesn't know how the guy he replaced did what he needs to handle now.


WOTDAH, I don't know how it is at Oz Ford, but here at US Ford there is plenty of work ethic. Yeah, you've always got your 2 1/2% of workers that you'd like to kick to the curb, but I will speak for myself and my 16 years with Ford.

On the line, while I had a job running in 4 seat bolts, among all the other tasks on that job, I would have a bolt get cross threaded or otherwise need to be replaced/repaired about every 3 to 6 months. I ran over 1,200 seat bolts a day. That's 7,200 bolts on the 6 day work weeks we were working. In 6 months that would be over 170,000 bolts before I had a problem with ONE. Every bolt had to be hand started before I ran it down with an air gun that sometimes would not click off when it hit torque. It would then take you for a ride and slam your knuckles into the edge of the seat frame. Time to get the gun fixed and hope you don't need stitches.

While I was in maintenance (Toolmaker) many times I stayed past the end of my shift with no pay to finish up a breakdown I was fixing. I could have dropped things and walked away and let the next shift fix it, but the production line was down and everyone was waiting on the equipment I was fixing. I got it done and told them to start the line. It was a matter of pride for me.

I gave up many weekends, too many, because of work that needed to be done while the line was down. Sure, the money was great, but that was my time and time with my family that I was giving up. Looking back on it I would not have done it so often. At the time I just knew the boss asked me to work because I was the "go-to" man when it came to drawing in CAD, programing the CNC, and a few other specialized tasks.

I designed, engineered, machined, welded, and assembled the aperatus that enabled the vehicles to be removed from their carriers after we retooled for a new vehicle. This was NOT my job to come up with the idea, design, and engineer the solution. It was a need my boss had and I love a challenge. I saved the company over $300,000 or more by accomplishing this for 2 weeks pay and metal that was already in our stock rack. So did I get a bonus? A gift? An award? I didn't even get a pizza.

Here's a link to this task I resolved on my own. It shows the design, CNC programing, fabrication, and a slideshow of the aperatus functioning, which it did flawlessly for the 3 years we produced this vehicle.

http://www.1001hobbies.info/1001hobbies_039.htm




I could go on and on but I think I made my point. I am not the only one I know that is like this, and there are some really committed people on the line that bend over backwards, sacrifice, and sometimes sacrifice their bodies to get something accomplished. Like I said, I don't know how it is at Oz Ford, but you state " There are no work ethics at ford, that went out the window years ago." and I have to take great exception to that.

What is your related experience?



Steve

[SSbaby]

Originally Posted by Ohio XB

That raises an interesting point. When people speak about the old timers leaving, yeah, I think some have stayed too long. For others that have been here a long time, but not over stayed, when those people leave they take an amazing amount of experience and knowledge with them. There are tricks to fixing certain things, tricks for figuring out where panel damage is occuring, and many other "tricks of the trade" that walk out that door with them.

When we've had a couple hundred people leave at once, seasoned people, there is an immediate affect on quality. Issues take longer to remedy, repairs take longer, a broken down machine may have no one to fix it because the guy they automatically called on has now retired, and nobody else has the same familiarity with that equipment.

An Engineer with 25 years experience at Ford may have been let go and a guy with 3 years put in his place. Not only does he not know what he is doing, he also doesn't know how the guy he replaced did what he needs to handle now.


WOTDAH, I don't know how it is at Oz Ford, but here at US Ford there is plenty of work ethic. Yeah, you've always got your 2 1/2% of workers that you'd like to kick to the curb, but I will speak for myself and my 16 years with Ford.

On the line, while I had a job running in 4 seat bolts, among all the other tasks on that job, I would have a bolt get cross threaded or otherwise need to be replaced/repaired about every 3 to 6 months. I ran over 1,200 seat bolts a day. That's 7,200 bolts on the 6 day work weeks we were working. In 6 months that would be over 170,000 bolts before I had a problem with ONE. Every bolt had to be hand started before I ran it down with an air gun that sometimes would not click off when it hit torque. It would then take you for a ride and slam your knuckles into the edge of the seat frame. Time to get the gun fixed and hope you don't need stitches.

While I was in maintenance (Toolmaker) many times I stayed past the end of my shift with no pay to finish up a breakdown I was fixing. I could have dropped things and walked away and let the next shift fix it, but the production line was down and everyone was waiting on the equipment I was fixing. I got it done and told them to start the line. It was a matter of pride for me.

I gave up many weekends, too many, because of work that needed to be done while the line was down. Sure, the money was great, but that was my time and time with my family that I was giving up. Looking back on it I would not have done it so often. At the time I just knew the boss asked me to work because I was the "go-to" man when it came to drawing in CAD, programing the CNC, and a few other specialized tasks.

I designed, engineered, machined, welded, and assembled the aperatus that enabled the vehicles to be removed from their carriers after we retooled for a new vehicle. This was NOT my job to come up with the idea, design, and engineer the solution. It was a need my boss had and I love a challenge. I saved the company over $300,000 or more by accomplishing this for 2 weeks pay and metal that was already in our stock rack. So did I get a bonus? A gift? An award? I didn't even get a pizza.

Here's a link to this task I resolved on my own. It shows the design, CNC programing, fabrication, and a slideshow of the aperatus functioning, which it did flawlessly for the 3 years we produced this vehicle.

http://www.1001hobbies.info/1001hobbies_039.htm




I could go on and on but I think I made my point. I am not the only one I know that is like this, and there are some really committed people on the line that bend over backwards, sacrifice, and sometimes sacrifice their bodies to get something accomplished. Like I said, I don't know how it is at Oz Ford, but you state " There are no work ethics at ford, that went out the window years ago." and I have to take great exception to that.

What is your related experience?



Steve

Great post! It's a shame not everybody has your work ethics. It sounds like you circumvented some union jobs to save your company some $.

It's such a tough call. People are people... you don't want to demoralize the people who actually build the cars as it's a fine line between having a dispirited crowd and achieving quality and ultimately growing sales.

Taking away the entitlements of the production personnel is never an easy decision and needs to be weighed up carefully in light of the objectives of the company. There are other alternatives. And I hope that Ford's management team have considered them all before embarking on this path.

[irish2]

Originally Posted by Ohio XB

In 6 months that would be over 170,000 bolts before I had a problem with ONE. Every bolt had to be hand started before I ran it down with an air gun that sometimes would not click off when it hit torque. It would then take you for a ride and slam your knuckles into the edge of the seat frame. Time to get the gun fixed and hope you don't need stitches.


Steve

This is what the office jockeys fail to realise. Everyday people in both Australia and the US, two of the most advance countries on the planet are putting their bodies on the line for minimal pay. Then they wonder why guys strike. Some of the safety injustices against myself and fellow workers have made my blood boil in the past. All you can do is complain and go back to work. It's the only thing that puts food on the table after all.