As the United Auto Workers union faces off against Detroit’s Big Three automakers in a historic strike on Friday, the key demand is pay. Workers at Ford, General Motors, and Stellantis (formerly known as Fiat Chrysler) are demanding a 40% increase to make up for years of inflation. And, to show the companies can afford to give their workers more, the union is highlighting the automakers’ exceptional generosity to a sliver of their workforce: Their CEOs.
While some fear the impact that a long-lasting strike could have on the economy, with the Business Roundtable saying it was “deeply concerned,” UAW president Shawn Fain suggests it’s the top brass at the Big Three that has the most to lose.
“It’s not [that] we’ll wreck the economy. We’ll wreck their economy, the economy that only works for the billionaire class and not the working class,” Fain told CNN this week.
The UAW also shot down Ford CEO Jim Farley’s attempts to paint workers’ demands as unrealistic. After Farley unfavorably compared the union’s pay demand to that of schoolteachers and firefighters, suggesting, using dubious figures, that a single auto workers could make “four, five, six times” a teacher’s salary, the UAW called out his hypocrisy by pointing to Farley’s own pay package.
“This man made $21 MILLION DOLLARS last year,” the UAW said in a post. With the median Ford employee making less than $75,000 in 2022, according to SEC filings, Farley took home the pay of 281 Ford workers.
Put another way, an hourly Ford employee would need to labor for seven working lifetimes to earn the same amount of money that Farley, between his base salary, bonus, stock options and fringe benefits, took home in a single year.
The divide between Farley and his workforce isn’t unique—the disparity between the salaries of General Motors and Stellantis chief executives and their employees was even greater. The sky-high pay highlights a widening inequality between leaders and the rank and file, fueling workers’ suspicions that CEOs are increasingly out of touch with their employees.
A growing gap
At General Motors, the worker-to-boss disparity is even more extreme—GM CEO Mary Barra made 361 times her typical employee’s pay last year, bringing in $29 million while the median worker earned $80,000. Similarly, Stellantis CEO Carlos Tavares made the salary of 365 employees, earning $25 million (or 23.4 million euros) while the typical employee earned $68,000.
Ford, GM, and Stellantis did not respond to Fortune’s request for comment.
While workers contend with higher costs of living as inflation and interest rates rise but their paychecks remain the same, top CEOs’ pay continues to increase steadily—with barely any regard for how their companies perform. Record stock-market performance in 2021 drove CEOs’ pay up by 17% that year, according to research from executive compensation firm Equilar—but while stocks fell in 2022, CEO pay just kept rising, albeit by a smaller portion.
Just look at Tavares: The CEO of the company that makes Jeeps and Chevys saw his pay more than double from $12 million in 2020 to $23 million in 2022. And earlier this year, the nonprofit advocacy group As You Sow named Ford CEO Jim Farley one of its 100 most overpaid CEOs, decreeing that over $8 million of his $21 million pay package was “excess.”
The inflation of the past three years is especially galling for autoworkers, who agreed to give up automatic cost-of-living increases in 2008 when two of the Big Three filed for bankruptcy and had to be bailed out by the federal government. Since then, workers’ inflation-adjusted income has fallen 19%, according to the Economic Policy Institute, a left-leaning think tank.
“The Big Three CEOs saw their pay increase by 40% over the last four years, while our pay only went up by 6%,” Fain said at a news conference.
Fain, and the rank and file, are betting that the Big Three can shell out more. EPI predicts them to pull in more than $32 billion in additional profit just in the second half of this year.
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