BloodEclipse
Grandmaster
How much value do UAW members contribute to their employers?
American autoworkers are among the most productive workers in the world. According to the U.S. Census Bureau, the typical autoworker produces value added worth $206 per worker per hour.1 This is far more than he or she earns in wages, even when benefits, statutory contributions and other costs are included.
How much are labor costs in relation to the total price of a new vehicle?
The total labor cost of a new vehicle produced in the United States is about $2,400,2 which includes direct, indirect and salaried labor for engines, stamping and assembly at the automakers’ plants.
This represents 8.4 percent of the typical $28,4513 price of a new vehicle in 2006. The vast majority of the costs of producing a vehicle and transporting it to a dealership and preparing it for sale – including design, engineering, marketing, raw materials, executive compensation and other costs – are not related to direct or indirect manufacturing labor.
Driven by more consistent, leaner processes and buyouts of tens of
thousands workers, the Detroit Three automakers in 2007 nearly erased the
productivity deficit against their Japanese-based competitors, despite
declining production and shrinking market share.
The difference among the Big Six from the most to least productive in
terms of total manufacturing labor (Assembly, Stamping, Engine and
Transmission) has dropped to 3.50 hours per vehicle (or about $260 per
vehicle), down from 10.51 hours (or $790 per vehicle) in 2003.
Driven by more consistent, leaner processes and buyouts of tens of
thousands workers, the Detroit Three automakers in 2007 nearly erased the
productivity deficit against their Japanese-based competitors, despite
declining production and shrinking market share.
The difference among the Big Six from the most to least productive in
terms of total manufacturing labor (Assembly, Stamping, Engine and
Transmission) has dropped to 3.50 hours per vehicle (or about $260 per
vehicle), down from 10.51 hours (or $790 per vehicle) in 2003.
General Motors brought its total manufacturing productivity performance to
32.29 hours per vehicle, its 15th consecutive year of improvement.
Honda and Nissan led the six largest North
American automakers, each earning a pretax profit of $1,641 per vehicle on
their North American sales, followed by Toyota at $922 per vehicle. Chrysler
lost $412 per vehicle for the first nine months of 2007, while GM and Ford
lost $729 and $1,467, respectively, per vehicle for the full year. This
reflects that the Detroit Three still pay more for health care, pensions and
sales incentives. They also support more dealers relative to their respective
market shares, than either Toyota, Honda or Nissan.
The innovative agreements the United Auto Workers reached with the three
domestic companies likely will enhance their competitive position in the
future.
First, the union agreed to a lower-tier wage -- about $14.20 an hour --
for new hires.
What is being missed in most of this is an attack on the pensions.
The Big 3 have problems with too many dealers. They want to reduce those numbers but with the franchising laws it will cost them dearly.
It cost over 2 Billion to eliminate the Oldsmobile line.
UAW wages are not the problem and are in line with the other automakers.
GM needs to get through a rough patch here until more of the retirees die off. I know that sounds horrible but it is a business fact. Many of the retirees are all close to the same age group as GM had hired employees in waves. When the number of retired to the number of active workers adjusts GM will be just fine.