Ford’s CEO, Jim Farley, recently discovered something surprising: most of the youngest workers at the company were having economic difficulties. Some of them even had to work at Amazon after their shifts at Ford to pay their basic expenses. Farley was aware of this during contract talks with the union, when older workers told him: “None of the young people want to work here. Jim, you pay $17 an hour, and they are so stressed.”
So, Farley realised Ford had to do something about it if they wanted to attack and keep younger workers. So, let’s see what the company did.
Henry Ford
To find a solution, Jim Farley looked back and was inspired by a historic decision Henry Ford, the founder of the company, made. In 1914, more than a century ago, Henry Ford decided to increase the daily salary of his employees to $5, more than double of the average at the time.
This measure improved workers’ lives and helped create the American middle-households. This way workers could buy the same vehicles they manufactured, help their families, and live with dignity.
More than 100 years later, Jim Farley found himself in a similar situation so he decided to follow the founder’s example.
From temporary jobs to stable ones
Farley discovered that some of the youngest workers at Ford worked 8 hours at Amazon and then 7 hours at Ford, barely sleeping 3 or 4 hours at night. This situation led him to make an important decision: make temporary workers have full-time jobs. Thanks to this change, those employees started receiving better salaries, profit-sharing bonuses, and full health care benefits. It also gave them more job security and stability.
This policy began as part of the 2019 contract agreement with the United Auto Workers (UAW) union. Under this agreement, temporary workers who stayed with Ford for two continuous years could become permanent employees.
“It wasn’t easy to do,” Farley admitted. “It was expensive. But I think that’s the kind of changes we need to make in our country.”
Challenge
Despite all these positive things, Ford still faces a huge challenge: catching young workers’ attention. ManyGeneration Z youngsters don’t want to work at factories because they consider the salaries are low and the job is so tough.
A Soter Analytics’ study (2023) revealed the average salary in the manufacturing industry of the U.S. is $25 per hour, which is about $51,890 per year. This is lower than the average national salary of $66,600.
In the meantime, a Deloitte and The Manufacturing Institute report points out the country will need 3.8 millions new workers in manufacturing for 2033.
Education and skilled trades
Jim Farley thinks the answer is better education and training. He says the government should spend more money on trade schools and classes that teach useful skills, like fixing cars, working with robots, or building vehicles.
Farley used the example of Germany , where every worker at a fabric factory has an apprentice who starts learning since high school. This system guarantees there’s always young people ready to continue with manufacturing roles.
Ford’s labor challenges
Again, not everything was as easy as you might think because, in 2023, thousands of workers from the United Auto Workers (UAW) union went on strike to fight for what they should have had from the beginning: better pay and safer, fairer working conditions. The strike ended when a new contract was signed, but many workers still feel they don’t earn enough for how hard they work, which seems unfair having in mind car manufacturing makes so much money.
So, as Farley said, if people can afford the cars they build, everyone wins. That simple idea made Ford one of the most successful companies in history, and it might be the key to its future, too.