It is widely-known that in 1913, Henry Ford, inventor of the Model T and first chairman of Ford Motor Co., agreed to pay the company's factory workers double the minimum wage for the industry — a stunning $5.00 per day. He also agreed to reduced the standard work day from nine hours to eight.
The rationale for the largesse reportedly was more strategic than altruistic. Ford was creating his own private-sector stimulus package, essentially making sure employees could afford to buy the cars rolling off of his legendary assembly line. In turn, the workers with Model Ts became mobile advertisements for Ford. The idea — a car made "for the masses" — caught on.
This week, as Ford celebrates the 100th anniversary of the Model T, the company made another big announcement about its employees. But this time, Ford is offering some middle-class workers up to $140,000 to leave the company, reports The Detroit News.
The financially beleaguered car company announced on Tuesday that will continue to offer buyout packages to employees at 14 more factories, in addition to the offers made at two other factories earlier in the month. According to the Wall Street Journal (subscription required), the carmaker is cutting back on overtime as well, figuring that by nixing overtime incentives, employees might be more likely to take the packages. That's a far cry from doubling workers' salaries.
This morning, Ford announced a loss of $8.67 billion for the second quarter, stemming from, among other things, a $5.3 billion write-down on its North American assets, and a $2.1 billion charge taken on operating leases held by Ford Motor Credit.
With the ghost of Henry Ford hovering over Highland Park, Michigan, this week, it's hard not to think about what type of stimulus package the company founder would have offered employees of this era.
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