Putting off the inevitable

The lengths that struggling companies are prepared to go to come up with ways to reduce labour costs have been highlighted again by car maker Ford Australia.

According to a report in the Australian Financial Review this morning, Ford has proposed a two-tier wage system that would mean that new employees would get a base wage about 15% lower than existing workers.

Not surprisingly, unions have rejected this out of hand. Which is probably just as well for Ford, because a system like this would be terrible for the morale of its workforce and for Ford’s productivity.

Ford says it needs to look at all sorts of options to respond to the harsh realities of the current market.

But as we’ve said before at SmartCompany, companies need to be careful that they don’t use mechanisms such as pay freezes and two-tier systems and work-for-free arrangements to put off the inevitable – a big, painful restructure.

COMMENTS

Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments
Close
SmartCompany Plus

Sign in

To connect a sign in method the email must match the one on your SmartCompany Plus account.
Or use your email
Show
Forgot your password?

Want some assistance?

Contact us on: support@smartcompany.com.au or call the hotline: +61 (03) 8623 9900.