December 15, 2008


Fact Check - As for whether Toyota workers earn more than employees of U.S. domestic automakers: In 2006, at Toyota's Georgetown, Ky., plant, workers averaged more in base pay and bonuses than UAW members at Ford, General Motors and Daimler Chrylser, according to the Detroit Free Press. The difference was due to profit-sharing bonuses; Detroit's workers aren't getting many of those these days because, well, there's really nothing to share. The transplants don't give out much data, however, so it's hard to tell if this pattern is continuing or even if it applied to all Toyota plants in 2006. Labor costs only account for about 10 percent of the cost of producing a vehicle. And it's not the cost of American cars that people complain about; they're already often thousands of dollars less than their Japanese counterparts. Whatever changes may be made in the carmakers' labor agreements, we're convinced, and the recent hearings show, that there are much bigger problems in Detroit. Washington Post - GM workers average about $28 an hour, though new workers receive far less. The Nissan workers make about $25 an hour, the company said. "The overall compensation for a worker is not that different whether it's a foreign or domestic automaker in the U.S. -- they're all in the same ballpark," said Kristin Dziczek, assistant director of research at the Center for Automotive Research at the University of Michigan in Ann Arbor. "They have to be. Good wages and benefits avoid unionization." The biggest difference in the labor costs is that the foreign automakers don't have to pay for legions of retirees -- their workers are younger and haven't received benefits that are as generous, Dziczek said. From a letter from Peter Karmanos, Jr., chairman and CEO of Compuware Corporation, to U.S. Sen. Richard Shelby, R-Ala., a critic of bridge loans for American automakers. Peter Karmanos, Jr - I trust it is safe to say that when you refer to "government subsidies," you are referring to subsidies provided by both federal and state governments. And if this is in fact true, then I am sure you were adamantly against the State of Alabama offering lucrative incentives (in essence, subsidies) to Mercedes Benz in the early 1990s to lure the German automobile manufacturer to the State. As it turned out, Alabama offered a stunning $253 million incentive package to Mercedes. Additionally, the state also offered to train the workers, clear and improve the site, upgrade utilities, and buy 2,500 Mercedes Benz vehicles. All told, it is estimated that the incentive package totaled anywhere from $153,000 to $220,000 per created job. On top of all this, the state gave the foreign automaker a large parcel of land worth between $250 and $300 million, which was coincidentally how much the company expected to invest in building the plant.


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