Ford to cut North America, Asia salaried workers by 10 percent
reuters.com
reuters.com
It's sad to see them struggling, because their car lineup has been absolutely brilliant for the last few years. But now that the industry is at it's plateau, investors are very paranoid about any car company trying to invest in new areas (Ford spent much of it's earnings on tech companies). They would rather just see dividends instead.
It's their entry line that's lacking. I'm looking for a new car, and would love to buy a Ford.
Actually it's for an aging relative, and don't see much. I don't even want to walk up to that Focus, and I can't get her near it. Now she will listen to me on the impracticality of buying a Cooper Mini, and she will listen to me on what vechicles look nice, but are just too exotic for our future repair budget--basically me with with parts a account. But she won't look at a Ford, except the F150, which she can't even get into.
If anyone from Ford is listening. Buck the trend. Build a vechicle, that a customer can put 400,000 on. Build it like a 80' Toyota. Meaning just use common sence. Replaceable Ball joints, maybe at the most two computers. Nothing exotic. Just a people mover, with a splash of style? No dashboards that look like a sensor waiting to fail. Mechanic friendly. I had a Slick Rick car Salesman tell me no one works on their own vechicles anymore, and they all finance. He was naieve, or just trying to hussle? I know he knew nothing about about how a vechicle is put together, and shouldn't. Just a Salesman. Just a dude who checks his oil at every fill up--still can't figure out why. Maybe it can't be done with government regulations? I don't know.
Go ahead and put in six beverage holders, just make the thing last.
Make the thing last? Toyotas, and Hondas spend years honing that reputation, and are raking it in now. Do the same thing? You hit it out of the park on so many newer vechicles, now go back to the company roots. A vechicle your employees can afford, and want to buy?
(If there's any mechanics here, I would love your recommendations on some 2012 to 2016 vechicles that are good buys, and practical.)
If you're looking for something in the Focus/Cooper range.
I highly recommend the Honda Fit. I second hand one with 10-30K on it can be had for four figures. And it will go for 200K without major service, 300K if you live outside the rustbelt.
I recently switched to electric. I could not be more happy with the Nissan Leaf (mostly that the first service item in the manual is to change the Fob battery at 30K)
1) That choosing investment over dividends must be a selfless act that makes one worse at their job (rather than simply a different option, possibly even more lucrative).
2) That "we" (who?) don't make life choices for selfless reasons, when it's plainly obvious that many do.
3) The idea that investors don't have a moral guideline AND that that's somehow acceptable.
I didn't downvote you, by the way.
This implies that they can't do both investing and paying dividends at the same time. What leads you to believe investment by F isn't sufficient?
First, I wasn't implying investors are bad people. In fact, I tried to imply the opposite.
What I meant was that a lot of people (at least people I know) blame companies for making decisions that cut jobs, and investors for pushing in these directions.
But at the same time, nobody is so selfless in their own life decisions in order to sacrifice their careers for someone they don't know. In fact, most people will consciously decide to earn more and make their lives better even if that means other people will lose their jobs. For example, I doubt any software developer will ever change careers just because the software he works on will cause half of the sales team to be fired. That's what I mean by people not being so selfless in their own life decisions.
But when it comes to losing their own jobs, it's common to hear people say that companies or investors could decide take the loss, earn less and keep these jobs, like the decision was a choice between saving lives or killing puppies for 10 cents more, and someone is just too greedy.
So, by "expecting investors to grow this moral guideline", I didn't mean they don't have a moral guideline. I meant people expect a much higher moral guideline that would make them sacrifice themselves in favor of the greater good, while other people don't actually do it themselves.
That is some serious projection there. Most people spend most of their lives not acting selfishly. If corporations acted with the kindness that individual people have for each other then the world would be much different.
I won't say that's not selfish though; some people would trade 3 seconds of their time here and there gladly for treating others like they would like to be treated. It's swapping time and/or money for less tangible but very valuable "things".
But incidentally, this whole "selfish" stuff is kind of a red herring anyway; OP was talking about investors being short-sighted and "paranoid", not investors being selfish. You may say that's the same thing, but I'd disagree, I'd say people "keeping their more to receive their less" isn't people being selfish, it's more like getting stuck in a local optimum. Locally, that's great, globally, that's having lost.
So yea, people do some things in their own best interest, but the norms are hardly 100% in either direction. Yet, somehow companies are expected to be ruthlessly selfish in all areas.
Psychopaths are pretty often not acting in their own self-interest - they're screwing themselves in long-term to get short-term gains. A person who acts in their own self-interest is usually an upstanding member of society with perfect reputation. It's very rare for an actual, diagnosable psychopath to pull off something like that.
They have the mandate to create new regulation. They could for example say that pumping gas at the station is a job that requires training and only qualified personnel can do this job.
That would instantly create new jobs and the businesses would be forced to accommodate.
Hiring someone is a last recourse for any business since it's very expensive so you can't expect businesses to magically create jobs.
I'd suggest reversing it and taxing capital gains at the full rate and income tax at half. This is how it's done in Switzerland I believe, if you want a case study. They seem like they're doing okay.
Paying someone for their labor is a taxable transaction. Selling an asset at an appreciated value is a taxable transaction. Transferring wealth to descendants after death is a taxable transaction. 'Already taxed' money is not a thing.
Consumption taxes are about as efficient as taxes get, especially when you can exempt specific products (and increase taxation on extreme luxuries).
Jobs must exist by market demand, artificially creating jobs is the worst thing a country can do. Every law had good intentions, it's always the indirect side effects that cause problems.
I live in New York... New Jersey has mandatory pump attendants and the prices are all on-par or cheaper than surrounding states.
For all of the bellyaching, i don't think that people are as expensive as they seem.
A common fuel station here usually have 8 pumps, and usually 4 employees to operate at a time. Due to laws on working hours, etc, there may be 2 or 3 shifts. Without going into peak hours and different # of people per shifts, a standard station may easily have 10-15 employees. Then multiply what you pay to each employee by 2 due to taxes, etc.
Not saying it's the highest of the expenses, but employees in Brazil adds up to the operation costs. It's one of the main complaints in business here.
Again, it's not free, but operating pumps is far from the expensive bit.
Second one person can operate more than one pump. In a peak hour you can probably hit 50+. Also, one person from 10pm - 6am then 2 people from 6-2pm and 2 people from 2pm to 10pm means that 2 people per hour occurs when you have fewer people. Further, they will be doing stuff like cleaning during that down time meaning it effectively costs less than 1 person at night.
Also, many gas stations don't operate 24 / 7. You may have one on each side of the street during the day and then one shuts down at night.
PS: Small Gas stations average 500-1,000 people per day. / 24 hours that's 20-40/h on average.
Please, don't encourage them to spread that hellish concept out of New Jersey.
http://www.statesmanjournal.com/story/news/2015/12/29/driver...
There were endless political debates over this after the Great Recession when money and bonds were cheap and unemployment was high. Significant investments are needed in infrastructure (I think that was even a Trump campaign promise?) across the US but the issue has become unnecessarily politicized.
The problem with socialism is that sooner or later, you run out of money to steal.
The end result of your logic is basic income. Which is, no matter how useless you are, you still get food and shelter. Food and shelter is not a human right.
Why do companies offer early retirement incentives? Wouldn't it be cheaper to wait until the day(or week or month) that you'd otherwise offer them to leave on, and fire them right then without any benefits? Especially since the stated purpose of it is to save money.
Ford in particular would probably get some negative PR. And since the most expensive employees are older, they might try to sue you for age discrimination. Is it just risk mitigation, or does Ford actually benefit from the incentive? 10% might be too large of a change to do all at once, especially at Ford's size; so buying them off lets them get rid of people gradually without surprising people.
I can understand why executives have to be bought off: They usually negotiate an accelerated stock vesting if they get fired without cause. What about anyone below that?
Also, I know that Ford certainly used to have a solid union. I wouldn't be surprised if they have workers who can't simply be instantly fired without cause and with cancellation of all benefits. Like some kind of worker's paradise.
It's hard to imagine that the cost-savings justifying the long-term consequences of losing of the best employees + candidates to competitors.
That's a trick you can pull once. And after you do all of the skilled employees are going to be eyeing the door.
Complex answer: Businesses that have been around this long have learned to survive by not making enemies. A tenant of this brand of capitalism is that it is cheaper to make mutually beneficial deals than to 'win'.
Also, because the brand is so tied up in American identify, and many of their workers are their own consumers, they don't want to muddy the waters, especially if they expect to hire back some of the same workers again later.
salaried employees at ford aren't unionized, for the most part.
The rest of this is correct.
Because it is easier to reduce your workforce when folks choose to leave rather than if they go unwillingly. If you get enough reduction from this method, folks aren't as worried about their jobs. And i'm guessing in the long term, there are fewer disgruntled ex-employees.
Wouldn't it be cheaper to wait until the day(or week or month) that you'd otherwise offer them to leave on, and fire them right then without any benefits? Especially since the stated purpose of it is to save money.
Possibly upfront, but not in the long run. The nearly retired folks are more likely to earn more money and will likely be retiring at some point anyway so a fair amount of the costs will be happening nevertheless. From what I've seen, usually there is a decent one-time bonus and possibly earlier earning on retirement. With regular firing, unions generally require the lowest seniority folks go first. Over time, this is actually more expensive with day to day operations because these folks tend to earn the least. Plus all the hits to the employee morale.
Here's a reason: because it's an awful thing to do.
Also, with large companies even during layoffs they're hiring for particular skilled positions. You don't want to get the reputation as an employer which mistreats its people.