Forbes Magazine spotlights Mexico's auto manufacturing boom
America's Car Capital Will Soon Be Mexico
Forum Discussion
This may or may not have any relevance – since there are obvious difference between the US and Mexico.
About 100 years ago Henry Ford more than doubled pay to his main production employees from about $2.30 a day to $5 a day. Doesn’t sound like much. The rest of the titans of business of the day were furious and thought he was crazy. But Henry was actually a genius and had run the numbers before making this momentous decision. There is a long list of reasons Henry added things up. Here are some of them.
Henry was going into mass production. He would be mass marketing. He would be marketing to the masses. If the masses have no money they cannot buy massive amounts of whatever you are making. Workers are also consumers. Consumers with money will consume. Workers without money cannot consume.
Better paying jobs attract the best workers. Better workers produce better products. Better workers cut production costs. If you pay the most you will attract the best workers.
Better paying jobs make for more loyal workers. Loyal workers stay on the job. Training new workers can be extremely expensive. High turnover can be extremely expensive. Experienced workers can be more productive. New workers may not be productive and profitable at all before they decide to quit or move on to another job.
Workers making good pay do not miss work or call in sick – they want to keep that job so they show up and put in a days work. Not meaning this as any kind of anti-union comment but it was many years before Ford had to deal with unions – Henry did not raise pay due to union or any requests or demands made by employees.
There are more factors to Henry’s figuring and he was not 100% correct on all of them – maybe not 100% on any of them. But he became extremely wealthy and many say it was (including Henry) because of this decision. Some economists to this day say Henry create the middle class in the US.
I am not trying to take this thread off topic or start any war of words. Economies are based greatly on the productivity of workers. Labor used to be celebrated. Now labor has somehow become the bad guys. If today’s business leaders would actually become the kind of leaders Henry was we might see some economic improvement in many areas of the world.
About 100 years ago Henry Ford more than doubled pay to his main production employees from about $2.30 a day to $5 a day. Doesn’t sound like much. The rest of the titans of business of the day were furious and thought he was crazy. But Henry was actually a genius and had run the numbers before making this momentous decision. There is a long list of reasons Henry added things up. Here are some of them.
Henry was going into mass production. He would be mass marketing. He would be marketing to the masses. If the masses have no money they cannot buy massive amounts of whatever you are making. Workers are also consumers. Consumers with money will consume. Workers without money cannot consume.
Better paying jobs attract the best workers. Better workers produce better products. Better workers cut production costs. If you pay the most you will attract the best workers.
Better paying jobs make for more loyal workers. Loyal workers stay on the job. Training new workers can be extremely expensive. High turnover can be extremely expensive. Experienced workers can be more productive. New workers may not be productive and profitable at all before they decide to quit or move on to another job.
Workers making good pay do not miss work or call in sick – they want to keep that job so they show up and put in a days work. Not meaning this as any kind of anti-union comment but it was many years before Ford had to deal with unions – Henry did not raise pay due to union or any requests or demands made by employees.
There are more factors to Henry’s figuring and he was not 100% correct on all of them – maybe not 100% on any of them. But he became extremely wealthy and many say it was (including Henry) because of this decision. Some economists to this day say Henry create the middle class in the US.
I am not trying to take this thread off topic or start any war of words. Economies are based greatly on the productivity of workers. Labor used to be celebrated. Now labor has somehow become the bad guys. If today’s business leaders would actually become the kind of leaders Henry was we might see some economic improvement in many areas of the world.
