Meep meep is the sound that auto executives' pay makes as it goes swoshing by the average auto worker's wage. The executive-to-worker pay ratio is 183 to 1. In 1990, it was 85:1; in 1980, 42:1; and in 1970, 11:1. CEOs discovered that life is even better when they stack their company's compensation board with friends.
In the last five years, "average executive pay at GM and Ford grew by 32% ... while median auto worker pay grew by just 8.8%." Yes, auto workers already make good money. But the strike is about an Einsteinian theory, that of relativity.
G.M.'s top exec, Mary Barra, made $28.97 million last year, reported Detroit News in April. Jim Farley, at Ford, made almost $21 million in 2022 — and that was a compensation cut. Same year, Stellantis's Carlos Tavares received $24.8 million — a 22% increase from the year before.
And so the UAW's pay hike demand of 40% over four years seems not so out of line. The Big Three are counter-offering about half that. Via DealBook, the companies are saying that "the billions of dollars they’re investing in electric vehicles make it harder to pay substantially higher wages."
Says CEO Barra: "Make no mistake: If we don’t continue to invest, we will lose ground, and it will happen fast. Nobody wins in a strike." While that is patently untrue — pay raises are often obtained only through walkouts, and higher wages have a positive economic ripple effect — strikes that come with real pain also come as a result of greedy, selfish executives.
Put in the vernacular: They asked for it, what with their 183-to-1 pay ratio.
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P.S.: It's dated (1986) but still the most insightful and certainly the most engrossing commentary on the U.S. auto industry: David Halberstam's The Reckoning. Its 700 pages fly by; it fascinates that much. Then again, everything Halberstam wrote fascinates. (If the book has a thesis, it's that virtually every decision auto executives made decades ago turned out to be utterly dunderheaded.)