Payday just got better at Ford (F).
For the first time since it negotiated a tiered wage structure with the United Auto Workers in 2007, the carmaker is increasing the pay for some of its entry-level workers. 300 to 500 employees will see their salaries go from $19.28 an hour to $28.50 an hour.
Yahoo Finance Editor in Chief Aaron Task points out this arrangement came about before the government had to rescue the auto industry.
“This is one of the deals that Ford struck before the 2008 crisis,” he notes. “Remember they didn’t take a bailout because they restructured their debt and they had made agreements with the union before the crisis really hit.”
Task adds Ford’s move comes because it’s adding more employees to the assembly line.
“This is a positive sign for workers, period,” says Task. “The key reason Ford is giving those raises to those workers is because they are hiring other workers who are entry level, and part of their deal with the union is they can only have so many entry level employees making the lower end of the pay scale. So when you bring in more people, you have to give somebody in that contingent a raise and it’s certainly good for those workers.”
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Ford is hiring more workers-- 1550 in all-- because of demand for its F-150 pickup, the most-popular vehicle in America.
“It’s a good sign for Ford and the demand they think they’re going to get for the F-150 truck which is obviously a huge deal for them,” he says. “It’s going all aluminum, they’ve had to totally retool their factories to do it. And we’ve talked to their CEO Mark Fields a couple of times in the past six months, and they are making a very large bet on the aluminum F-150.”
But will Ford’s decision mean other autoworkers will benefit? Task believes the jury is still out on that.
“I think the UAW is going to point to the strong auto sales we had last year, the strength of the auto sales we had in January, the forecast from AutoNation (AN) that we’re going to have a 17 million run rate this year for car sales and say to the big automakers, ‘Hey guys, the crisis is over, now is time to ramp back up,’” he says. “Whether the companies do that remains very much to be seen.”
See also: Size matters: January auto sales