USA Labor Rates

United Auto Workers are well paid. If you add up their wages and all benefits, the component cost of union labor in a Big Three auto is about 8.4%. Labor assembles the cars. The design, engineering, sourcing raw materials, legal and accounting, marketing, transporting to a dealership and preparing it for sale, executive compensation and other costs – are all under the control of management.

If labor agreed to work for free, no wages or benefits, no pensions, no nothing, absolutely nothing, and signed a 100 year contract to this effect, it would not be enough to save the Big Three automakers.

The problem is management, not labor. Nonetheless, we are told the problem is labor. US Census says labor adds over $200 an hour in value to a car. Competent management has vast areas where it could control costs and become competitive. But USA management knows it does not have to. Labor leadership, under the control of the USA government will agree to labor cuts. At the same time management will be bailed out. Jimmy Hoffa would not put up with this.

Bookmark this post --- Email this post