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RS Weekly Update - Ford and the UAW



September 28, 2011 – Comments (1)

So I read this article today that set me back just a bit, and I don’t mean in a good way. First here’s the link:

I suppose that everyone has their own perspective on things like this and I completely respect that. But for the most part I’m not a union kinda guy. Sure, I get why they exist and understand the battle for workers’ rights. But I also believe big-time in the risk-takers who are behind the businesses. I’m not saying they’re all angels, don’t get me wrong. But I get the feeling that the popular sentiment among many is that CEOs are way overpaid and theirs is an easy job that anyone can do. I am not one of those people. Being that I work for a founder-led company and know what the Gardner brothers have been through to get The Motley Fool to where it is today, I tend to side more with the folks who are making it happen.

The crunch that Detroit’s Big Three felt over the past few years was a long time coming. Incentives were way off kilter and there was no real pay for performance structure that is now being dealt (I’m referring to recently-signed UAW/GM agreement here). I’m not saying I’m glad it happened (the crunch that is), so don’t think I’m some hardass Republican who can’t sympathize with the working man. In case it matters to anyone I’m a true independent voter who leans more towards fiscal conservatism and couldn’t care less if gay people want to get married. That is to say that when it comes to social issues I prefer to let people live their own lives and I'm not a terribly religious man. I have voted for Democrats, Republicans and Libertarians and if you don’t like it then I suppose it’s your right to disagree with me and not read what I write.

So then I see this passage: “The average hourly worker at Ford made $109,020 in 2010, including wages, benefits and overtime, up 17 percent from 1999. But the average salaried factory supervisor made $99,760 in wages and benefits, up just 2 percent in the same period, the records show.”

If this is even anywhere close to accurate then I cannot fathom what in the world the problem is. Are the workers not happy with the money they’re making at Ford? Or is it the rest of the UAW that is upset because the workers at Ford get paid better? Either way I say suck it up and deal with it. Sounds like a pretty sweet check to me. And seriously? You have a problem with Mulally’s compensation? Lemme tell you from my experience meeting the guy firsthand at the auto show in Detroit this past January and walking around with him on the floor: If what I saw is any indicator then I think he does pretty amazing job and is a key reason Ford is in the position it is in today. The guy gets pulled in 500 different directions at once to appease seemingly every auto industry exec and slimy politician in the country, so forgive me if I believe that his compensation is quite fair. The fact that the overwhelming majority of it is tied to the company’s performance should tell you where his priorities are and when I even hear the word “strike” muttered among the UAW I want to puke.

Of course their leaders say they wouldn’t consider a strike unless such-and-such. But the fact that they even mention the word strike and qualify it leads me to believe that they would consider it or at least use it as leverage of some kind. That’s cool…I get it. But just remember that the sword cuts both ways here. Unemployment is still brutal and there are a lot of Americans still in need of work. I'd say the point has been proven beyond a doubt that if they fall back into the trap of demanding more based on historical precedents, well the historical precedents have already shown us where that leads and I don’t think the government would be too quick to bail the automakers out a second time. Not that they had to bail out Ford in the first place.

Foolish best,


Portfolio Returns

As of market close September 22nd the Motley portfolio is up 2.35% and Mr. Market is down 3.66%. For those keeping score the Motley portfolio is beating market by 6.01% since inception.

Straight from the Onion

The headline is funny, but what’s funnier is that I could see this happening one day:,26173/

1 Comments – Post Your Own

#1) On September 28, 2011 at 10:13 PM, Varchild2008 (85.34) wrote:

+1 rec because they wouldn't allow me to give you more than that.

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