An average Stellantis worker would have to work 365 years – that’s a long shot – to reach the salary that Stellantis CEO Carlos Tavares earns in 2022. General Motors (GM) CEO Mary Barra earns 362 times more than the average employee. And in Ford’s case, the first manager earned compensation 281 times higher than the average or average worker, who earned as many more as those who earned less. In the strike against the Detroit Three Giants, UAW union leader Shawn Fain takes advantage of high corporate profits and low wages…
An average Stellantis worker would have to work 365 years – that’s a long shot – to reach the salary that Stellantis CEO Carlos Tavares earns in 2022. General Motors (GM) CEO Mary Barra earns 362 times more than the average employee. And in Ford’s case, the first manager earned compensation 281 times higher than the average or average worker, who earned as many more as those who earned less. In the strike against the three Detroit giants, UAW leader Shawn Fain is using the companies’ enormous profits and the stratospheric salaries of their managers to stoke workers’ anger and argue that the wage increases demanded are not disproportionate.
United States President Joe Biden agreed with workers on Friday: “Over the past decade, auto companies have made record profits, even in recent years, thanks to the extraordinary skills and sacrifice of American workers.” The UAW. But these record profits, in my opinion, have not been fairly distributed to these workers.”
In the last three years, GM made a profit of $26.38 billion (around €24.7 billion at current exchange rates). In July, the company raised its profit forecasts for this year to a range of $9.3 billion to $10.7 billion. Its president and CEO, Mary Barra, earned $23.7 million in 2020; 29.1 million in 2021 and 29.0 million last year. The group employs 104,000 people in the United States and 63,000 in other countries. The average worker (calculated under U.S. Securities and Exchange Commission rules that allow people from countries with low weight in the total to be excluded from the calculation) had compensation of about $80,000, so Barra’s compensation was 362- times higher, according to the company’s official information.
Ford has also raised its forecasts for this year and expects to achieve between 11,000 and 12,000 million dollars, in this case in net operating income. The company suffered accounting losses and posted losses in 2022 due to the decline in the value of its electric vehicle subsidiary Rivian and the closure of Argo, its driver’s car investment with Volkswagen. Still, it earned $14,677 million in three years. Its president and CEO, James Farley, earned $11.8 million in 2020; 22.8 million in 2021 and 21.0 million in 2022. Ford employed 186,769 people in 2022, including 90,873 in the United States. Farley’s compensation was 281 times that of the average employee, about $74,700 per year.
Stellantis has generated 33,172 million in profits over the last three years. Carlos Tavares earned 19.2 million euros in 2021 and 23.5 million euros in 2022. According to its own calculations, this last value corresponds to 365 times the average salary of the group’s employees (64,328 euros), which is based in the Netherlands and uses slightly different calculation criteria than those of GM and Ford. Stellantis shareholders voted against the remuneration package of Tavares, however, this vote was only advisory in nature.
The executives defend themselves by saying that a large part of the compensation is variable and in shares and is linked to the development of the company’s results and the company’s price. However, this becomes problematic. By containing costs (including salaries), companies can earn more, the stock market price rises and bonuses for managers become juicier: the conflict has been resolved.
In fact, the 40 percent increase in four years that the UAW originally demanded (they have since reduced their demands to 36 percent) was what top managers said they had during the last four years of the collective bargaining agreement in effect In recent years, employee salaries have only increased by 6% despite high inflation. Although this figure depends on the methodology used, it is evident that the pay gap between the salaries of top executives and employees has widened in recent decades, and not just in the automotive sector.
“The reason we are asking for a 40% pay increase is because CEO pay has increased 40% in the last four years alone. They are already millionaires. Our demands are fair. We demand our fair share of this economy and the fruits of our labor,” Shawn Fain said in an interview on CBS.
The UAW union and the companies have resumed negotiations. Meanwhile, the strike continues at three plants (a GM, a Ford and a Stellantis) in three different states (Michigan, Missouri and Ohio). The union prefers to strike with a selective strike, but reserves the possibility of the conflict expanding.
The impact on businesses and the economy in general is not yet clear. “It’s premature to make predictions about what this means for the economy,” Treasury Secretary Janet Yellen said in an interview on CNBC on Monday. “A lot will depend on how long the strike lasts and who exactly it affects.” Yellen believes that “both sides need to resolve their differences and work toward a win-win situation.”
Tesla and Toyota, winners of the strike
The strike against the three Detroit giants has only just begun, but there are already several winners. General Motors, Ford and Stellantis, as well as their UAW-affiliated workers, are facing a production halt and a rise in labor costs that are already much higher than those of Tesla, for example. Elon Musk’s company has a large productivity advantage in the production of electric cars and will be able to protect its margins against the models of major American competitors. Employees receive part of their compensation in shares but are not unionized.
The other winners are foreign manufacturers, particularly those with greater penetration of the U.S. market, notably Toyota, Hyundai, Honda and Nissan. Some have assembly plants in the United States, but their workforces are also not affiliated with the UAW and are not affected by the strike.
