Tuesday, September 25, 2007

GM Strike - How Much Can They Get?

Dollar Sign UPDATED and jumped to the top.... Via Wonder Woman we get the current GM average hourly wage cost (includes everything straight time, overtime, benefits, taxes, etc.) as $73 per hour. This is $25/hr. higher than the Asian companies total labor cost (from plants in the southern US). Full details here. which ends on this depressing note:
GM lost $12.3-billion over the past two years, but is regarded as the healthiest of the Detroit Three.
[end update]

G.M. Workers Begin Walkout Over Contract Impasse - New York Times Typical of the NY Times, the article is very friendly to the union. But how much more does the UAW think they can get?

In the 1950s unions got their employees 8% more than non-union shops. Today the difference is 65%.

Wages at UAW controlled plants range from $25.63 per hour to $29.75 - according the UAW's own website. That is straight time, and does not include the employers portion of Social Security (another 7%) or health care and other benefits. That is between 50 and 60 thousand dollars per year - more or less - before you include any overtime. (Average compensation in 2002 = $24.58 per hour straight time.) That 25.63 figure is for work that requires minimum skills.

In 2005, UAW union members paid 7% of their health care costs. Salaried workers at GM paid 27%. The average in America was that 32% of costs were paid by the worker. UAW worker John Clabon said "We pay our fair share." Health care came to $1600 per vehicle at GM in 2005.

How can a forklift operator make more than 100,000 dollars a year? Work in a UAW plant. Now they are crying in their beer (or they were in 2005) when their compensation dropped to $87,000 in one year. The guy the profiled declared bankruptcy because he had 400,000 dollars of debt. (Toyota, pays forklift drivers the national average = about 26,000 dollars per year - this in January of 2006). This is for a job that requires exactly one week of training.

Take a close look at that article on the $100,000 forklift drivers.
Despite the loss of time-and-a-half pay, some Michigan autoworkers continue to live large.

Many bankrupt autoworkers own two homes -- one is usually up north -- which means multiple mortgages. Most have two or more cars and sometimes a boat or snowmobile payment, according to information culled from cases filed by autoworkers in U.S. Bankruptcy Court in the Eastern District of Michigan.
...
Many broke autoworkers have tens of thousands of dollars worth of credit card debt. Target, Best Buy and Home Depot are common creditors seeking payment.
I didn't live that large when I made 100,000 dollars. (In part because I knew it wouldn't last.) Is it any wonder that the bankruptcy laws were changed? (If you make 87,000 per year, you can afford to pay something.)

I understand that the unions want to go back to the way things were in the 50s. But it ain't gonna happen. Americans won't pay a premium for an American car unless that premium buys quality, or provides something we want. And we don't care so much about the "foreign" companies when they are building cars in Tennessee, Kentucky, California, etc. They don't look so foreign when they employ lots of Americans. Add to that the quality.... and you are looking at "game over." [Megan McArdle gets the hat tip for getting this started.]

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