Re: [Pen-l] labor and the auto companies

[Carl Dassbach <dassbach@xxxxxxx>]

Does that include legacy costs, i.e, pension and benefits for retirees?  
As I understand it,  before it began massive layoffs, GM had two 
retirees for every worker and I am sure the figure is much higher 
today.  I know that the auto companies plan to offload these costs to 
the UAW but I do not know if it has occurred.

No matter, it would seem that the auto companies and other large US 
employers would support some type of national health plan just to shed 
or reduce these costs.

CHAD

Rudy Fichtenbaum wrote:
> We keep hearing from conservatives and even a number of liberal 
> commentators that the reason the big three auto companies are not 
> competitive is because of high labor costs due to the fact that their 
> workers are unionized. I just looked at Compensation (Payroll plus 
> Benefits) as a percent of the Value of Shipments for Automobile and 
> Light Duty Motor Vehicle Manufacturing  in the Annual Survey of 
> Manufacturers. Compensation for all workers, not just production 
> workers is about 7.2% of the Value of Shipments. Of course this 
> includes both transplant as well as the "big three." Assume for a 
> moment that GM, Ford and Chrysler accounted for 50% of auto sales and 
> their labor cost was 50% higher than the transplants. That would imply 
> that Compensation for the big three was about 9% of sales compared to 
> 6% for the transplants. That would make labor costs about 7.5% for the 
> industry average. If that were the case and we cut labor costs at the 
> big three in half that would reduce the cost of producing an 
> automobile by 4.5%. Does anyone seriously believe that this would make 
> the big three competitive?
>
> Doesn't this expose the myth that the problems of the big three are 
> due to high labor costs? Am I missing something?
>
> Rudy
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