Detroit 3 Closing Worker Pay Gap with Foreign Competitors
By Phil Alex
Sean McAlinden, an economist working for the Center for Automotive Research, says that due to shifts in UAW retiree / health planning US auto manufacturers may end up with a labor-cost advantage in the next few years. GM is used as the prime example.
Here’s a look at the timeline:
In 2007, per-vehicle labor costs for GM were $1,400 more than Toyota, its largest international competitor. $950 of that was for retiree benefits.
In 2008, Detroit’s Big 3 manufacturers (Ford, GM and Chrysler LLC) were reportedly paying their hourly employees $69,368 per year on average versus $70,185 being earned by employees at foreign-owned plants. Salaried employees at the Detroit automakers were making $122,963 versus $81,506 earned by foreign-based counterparts.
Now, after all the re-negotiations, GM is working towards a new goal: “[hiring] more workers at the lower wage and it [hiring] fewer skilled-trades workers, who make more money than other factory workers”.
With 2,300 new employees working under the revised wage/retirement plans, GM’s employees are only $2 more costly than Toyota’s. McAlinden predicts that over the next 5 years, GM may even undercut Toyota’s pay by up to $10.
source: carscoop.blogspot.com
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In: Business Stories · Tagged with: Auto Manufacturers, Automotive Research, Chrysler, Cost Advantage, Counterparts, Detroit Automakers, Economist, Gap, Gm, International Competitor, Negotiations, Prime Example, Retiree Benefits, Retiree Health, Retirement, Salaried Employees, Salary Information, Skilled Trades, Timeline, Uaw
