Great article in today's Wall Street Journal titled, "Ten Hard Questions Facing the Car Czar." Of course, we don't actually have such a person yet, but taking the premise that Pres. Obama will soon name a federal car czar to oversee the U.S. auto industry bailout program, the WSJ asks and answers 10 key questions, such as: "How many jobs does the U.S. auto industry account for?" The short answer: 703,900 directly, and as many as 3 million indirectly if you include dealerships, warehouses and port workers.)
Here's another one: "How much more do U.S. auto makers spend on health care than foreign competitors?" According to the WSJ, the difference is in the billions of dollars. Quoting from the article:
In 2008, GM spent $4.8 billion on health care. That added about $1,500 to the cost of every car and truck it produced. Ford and Chrysler pay less than GM but are in the same range.
It's a different picture at Toyota. The company doesn't say how much it spends on health care, but analysts estimate that its health-care cost amounts to about $200 per vehicle. That's because Toyota provides health-care coverage for far fewer employees in the U.S. than any of the Big Three, and, most important, Toyota has far fewer retirees who depend on the company for health care.
One more eye-opener: "What do employees of the United Auto Workers costs auto makers in salary and benefits?" The difference is startling, largely due to health care and pension costs: $71 an hour for the Detroit Three, and $49 an hour for foreign-owned automakers. In other words, there's a $22 an hour difference in what Detroit is paying its workers (including hundreds of thousands of retired employees) and what Toyota, Honda and other transplants are paying.
Anyways, take a look at the full article, and let's hope that whoever ends up as Mr. or Ms. Car Czar, that they are prepared to make the tough decisions, not the politically expedient ones.
That $71 /hr figure for US autoworkers has been thoroughly debunked by several credible sources. It is also one of the first myths that pops up over at factcheck.org. the figure is arrived at by taking the most senior employee skilled classification wage rates, tacking on every possible minute of overtime and shift premiums that could be had and adding in intangible "benefits" that one may or may not ever use. Certainly not a whole lot of folks making over time or shift premiums in today's auto industry, and most have already have or soon to have benefits concessions as well
continuous repetition of this meme does not serve to help the cause of the embattled industry and its workers and suppliers, and pehaps might even suggest a bias toward foreign competitors or taking it a step further an anti labor anti US industry agenda, not surprising considering the source is the WSJ
I have worked in and around this industry most of my adult life and can assure the average blue or white collar auto worker isn't making anywhere near that kind of money.
The fact is the average UAW worker makes $58k yr. Starting pay for UAW assembly workers is $14 hr.
You do correctly point out that health care costs is a huge competitive disadvantage not only for US automakers, but US mfrs ingeneral, trying to compete against countries who supply national health care, or third world workers who have no health care at all.
__________________ Who ever heard of a skilled labor shortage that did not have a corresponding upward pressure on wages?
That $71 /hr figure for US autoworkers has been thoroughly debunked by several credible sources. It is also one of the first myths that pops up over at factcheck.org.
"When the new agreement is fully implemented, which should happen in 2010, the U.S. automakers would still bear labor costs of about $9 per hour more than Toyota, but that's far better than the current gap. The 2007 agreement also calls for a new two-tier wage structure and other concessions from workers." --factcheck.org
Even if the $71/hr figure is off, a $9 an hour difference is still significant, and I'm not sure how adding benefits into the figure is misrepresenting anything since benefits cost money, too.
You do correctly point out that health care costs is a huge competitive disadvantage not only for US automakers, but US mfrs ingeneral, trying to compete against countries who supply national health care, or third world workers who have no health care at all.
Also, I believe when they're making the wage comparison, they're comparing it to workers here in the U.S., in which case foreign automakers would also be paying health care benefits not subsidized by the government.
When Richard Nixon was caught on tape going with the ideological idea of turning the nation's healthcare into a model based on profit rather than dedicated to the well being of the nation's citizens this thing with the auto workers became a foregone inevitability.
Why is this so hard for most people to see? The answer is also obvious that most people, know it or not, have been blinded by ideology.
Chairman Mao had nuthin' on us when it comes to having ideological blinders.
That $71/hr figure for US autoworkers has been thoroughly debunked by several credible sources. It is also one of the first myths that pops up over at factcheck.org. the figure is arrived at by taking the most senior employee skilled classification wage rates, tacking on every possible minute of overtime and shift premiums that could be had and adding in intangible "benefits" that one may or may not ever use. Certainly not a whole lot of folks making over time or shift premiums in today's auto industry, and most have already have or soon to have benefits concessions as well
continuous repetition of this meme does not serve to help the cause of the embattled industry and its workers and suppliers, and pehaps might even suggest a bias toward foreign competitors or taking it a step further an anti labor anti US industry agenda, not surprising considering the source is the WSJ
I have worked in and around this industry most of my adult life and can assure the average blue or white collar auto worker isn't making anywhere near that kind of money.
The fact is the average UAW worker makes $58k yr. Starting pay for UAW assembly workers is $14 hr.
I think you need to reread the WSJ article again, and keep in mind that it's not saying that union workers are being PAID $71 an hour; it's saying that it COSTS the automakers that much for every worker when you factor in $29 for wages, $14 for wage-related expenses (vacation, overtime, etc.), $16 for retiree benefits, and $12 for other expenses (mostly health insurance).
The article also points out that the $71 figure has been reduced to $58 at Ford, thanks to the new labor contract. The wage disparity between the Detroit Three and foreign transplants today is $9, which as Jon Katz noted above, is still a hefty discrepancy.
Since it sounds like you're skeptical about the WSJ as a source, you might also want to do some background searches on factcheck.org to get a better handle on where their funding comes from.
When all is said and done the difference still means and average of $18,720.00 a year per employee is being paid out above and beyond another competitor. If you just do the simple math of let's say 100,000 employee's x $18,720.00 you get a cost of $1,872,000,000.00 spent per year more then a rival Company. It doesn't take a lot of thought to see that there is something wrong here and it needs to be addressed right now and not later.
It looks a lot different when you actually have the total numbers right in front of you of a lowball of only 100,000 employee's. How can a company survive like this???
That $71 /hr figure for US autoworkers has been thoroughly debunked by several credible sources. It is also one of the first myths that pops up over at factcheck.org. the figure is arrived at by taking the most senior employee skilled classification wage rates, tacking on every possible minute of overtime and shift premiums that could be had and adding in intangible "benefits" that one may or may not ever use. Certainly not a whole lot of folks making over time or shift premiums in today's auto industry, and most have already have or soon to have benefits concessions as well
continuous repetition of this meme does not serve to help the cause of the embattled industry and its workers and suppliers, and pehaps might even suggest a bias toward foreign competitors or taking it a step further an anti labor anti US industry agenda, not surprising considering the source is the WSJ
I have worked in and around this industry most of my adult life and can assure the average blue or white collar auto worker isn't making anywhere near that kind of money.
The fact is the average UAW worker makes $58k yr. Starting pay for UAW assembly workers is $14 hr.
You do correctly point out that health care costs is a huge competitive disadvantage not only for US automakers, but US mfrs ingeneral, trying to compete against countries who supply national health care, or third world workers who have no health care at all.
I'm sorry, Abogle, but your comment seems to exemplify the very problem. You apparently feel that $58k/yr is a reasonable pay for the average UAW worker, as well as all the other benefits (continuing on the payroll after retirement, continuing health care benefits, continued pay after being layed off, top-of-the-line health care, etc, etc, etc.) No one will argue that those things aren't nice, but how do you justify them?
The average experienced machininst in this country is paid $40k - $45k per year. I'm not referring to a button pushing machine operator, I mean someone that's been in the trade for 20 years and is capable of taking a print in hand and producing a finished part. I'm not saying this is 'good' or 'fair' pay, I'm just pointing out the reality of life. So how do you justify paying someone $28/hour to bolt part A to part B all day long? Maybe that oversimplifies things too much, but in a real American machine shop, a person like that (a part loading cnc button pusher) may reasonably get paid $16/hr.
And, while most companies will contribute to a retirement fund, if you walked into any real world company and demanded that they pay you after you retire, as well as provide health care, they would laugh at you hysterically as they threw you out the door.
Unions were originally conceived as a means to prevent employers from taking unfair advantage of their employees, and the fundamental ideology behind them is sound. However, as with so many other things, unions tend to swing things the other way and strong-arm companies into paying out much higher than average wages and benefits, and doing do to the businesses exactly what they were formed to prevent, namely, take unfair advantage of their respective companies. How can one company expect to survive in this economy against a non-union company who pays average pay and benefits to it's employees, when it has to bow to the unfair demands and burdens of it's union?
Are the unions to blame for all the woes of the big three? NO!!! But, the point I am trying to make is that they certainly contribute substantially to the problem.
Who are you to decide what is and isn't a fair wage. 58K a year is hardly a wage anyone will get wealthy earning. The old one guy one bolt assembly jobs have been gone for decades. Todays auto industry is the very model of high tech - complex automated assembly machines, CAD/CAM, CNC machining, robotics and so forth requiring computer skills and the skills and education to maintain and operate that machinery
And in a country as wealthy and properous as our own that also has the most expensive health care system in the world that leaves out 1/5 of the population and another amount at least double that are inadequately provided for in thc current system that puts US industries and workers at a severe competive disadvantage against countries who provide national health care.
Your kind of thinking of paying workers as little as can be gotten away with is a major contributor to our current economic woes.
In order to have a sustainable economy workers must earn enough to be able to afford the products and services they produce. The US auto industry used to understand this.
__________________ Who ever heard of a skilled labor shortage that did not have a corresponding upward pressure on wages?
Can the Detroit Three Survive?
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