Union vs Non-Union wages

[mettech]

...."In San Antonio, Toyota will use nonunion labor and will start its 1,600 hourly workers at $15.50 to $20.33 per hour, which will grow after three years to $21 to $25.

 

Harbour Consulting President Ron Harbour estimates Toyota's total hourly U.S. labor costs, with benefits, at about $35 an hour. The brand-new plant won't have any direct retiree costs foryears.

 

In Arlington, GM pays union-scale wages of $26.50 to $30.50 an hour to its 2,800 hourly workers there. On average, GM pays $81.18 an hour in wages and benefits to U.S. hourly workers, including pension and retiree medical costs...."

 

How can you compete against this?

 

By LEE HAWKINS JR. and NORIHIKO SHIROUZU?

Edited September 6, 2006 by mettech

[mikem12]

...."In San Antonio, Toyota will use nonunion labor and will start its 1,600 hourly workers at $15.50 to $20.33 per hour, which will grow after three years to $21 to $25.

 

Harbour Consulting President Ron Harbour estimates Toyota's total hourly U.S. labor costs, with benefits, at about $35 an hour. The brand-new plant won't have any direct retiree costs foryears.

 

In Arlington, GM pays union-scale wages of $26.50 to $30.50 an hour to its 2,800 hourly workers there. On average, GM pays $81.18 an hour in wages and benefits to U.S. hourly workers, including pension and retiree medical costs...."

 

How can you compete aganst this?

 

By LEE HAWKINS JR. and NORIHIKO SHIROUZU?

 

 

I guess one of the ways to compete is get rid of some of the jobs. I just heard that DTP is voting on a contract change (this week)where they will give up clean up and Material handling to out side sources. Can you say low wages. And since there is a good chance to get an agreement. You know it won't be long before the rest of the plants will have scabs working in the plants as well. You'll also notice the UAW international hasn't made any mention of this to the rest of the plants. SURPRISE!

 

Mike

 

Mike

[ZanatWork]

Gosh...Pioneer failed to mention anything like this!

 

The UAW...and unions, period...need to accept that their place in the country's industries depends on them giving back a huge amount, and right NOW.

[grbeck]

That $81 dollar an hour figure is an outright lie. I dare anybody to prove it correct, because you can't. Just another example of uninformed people making an unintelligent decision.

 

If they are including retiree medical costs in that figure, it could be correct. People over 65 can run up HUGE medical bills, and GM is supporting a small army of retirees. I've read that most medical expenses are incurred during the last two years of life.

 

Our society has figured out how to extend life span, but it costs lots of money...our ability to extend life is outpacing our ability to pay for it.

Edited September 6, 2006 by grbeck

[ZanatWork]

"outright lie"

 

I suppose all the people showing that domestic legacy costs compared to the imports was a "lie" when it showed that the costs per vehicle were 300-1200% higher? That was repeated from several sources.

 

The janitors making over $20/hr...are they lies?

 

The huge number of employees doing NOTHING but sitting around (thank God for crossword puzzles!)...are they lies?

 

 

Pass this on to Ronnie: give it back, or give itall back by getting the hell out.

[sparks will fly]

If they are including retiree medical costs in that figure, it could be correct. People over 65 can run up HUGE medical bills, and GM is supporting a small army of retirees. I've read that most medical expenses are incurred during the last two years of life.

 

Our society has figured out how to extend life span, but it costs lots of money...our ability to extend life is outpacing our ability to pay for it.

 

After 65 they should have medicare with GM or Ford as a secondary, so your post doesn't hold water sorry. I do agree with the part about extended life span but WTF even the government figured that out with social security.

 

Yes. Until somebody shows me some kind of report from one of the Auto manufacturers, instead of people just throwing numbers out, yes. It's an outright lie, and so is that 300 to 1200% figure you just regurgetated. You are part of the problem, not the solution.

 

And, if it is because of legacy costs, we are back to square one which you will not even mention. It is not the unions fault, but the companies for underfunding the pension plans. They wasted money on Jaguar, Land Rover, Kwik-Fit, Astin Martin, instead of investing in their future liabilities. Liabilities, I might add, that they agreed to, and the import workers are also granted.

 

Doesn't it amaze you that the number went from 65 an hour to 81 in less than a year? More fuel for the fire of the BS these companies are putting out to help end the UAW. Worst part is that some people buy in to this over and over, Zanat is what you take for heartburn.

 

Does anyone else understand how the penion funds work? I have tried on here before with no luck, Duh.

I don't remember the price of all those companies all together but as much as Jac spent R&D sure could have stayed in front of anyone.

[grbeck]

After 65 they should have medicare with GM or Ford as a secondary, so your post doesn't hold water sorry. I do agree with the part about extended life span but WTF even the government figured that out with social security.

Doesn't it amaze you that the number went from 65 an hour to 81 in less than a year? More fuel for the fire of the BS these companies are putting out to help end the UAW. Worst part is that some people buy in to this over and over, Zanat is what you take for heartburn.

 

Does anyone else understand how the penion funds work? I have tried on here before with no luck, Duh.

I don't remember the price of all those companies all together but as much as Jac spent R&D sure could have stayed in front of anyone.

 

There are lots of things Medicare doesn't cover. Which means that GM and Ford end up paying the bill. If you look, the portion of retiree costs that is causing them trouble is MEDICAL costs, not pension benefit (i.e., the monthly check mailed to the home) costs.

 

Whether health care costs for retirees are driving the figure to $81 an hour, I don't know, but it could be one explanation.

 

And the goverment hasn't figured out how to cope with an increasing life spans...which is why Social Security is under stress. People are retiring at the same age, but living longer. It is not uncommon for people to retire at 65 and live for 30 more years. It was uncommon in the 1930s, 1940s and 1950s.

[ANTAUS]

I was getting a quote to put up a fence and some lighting around the tennis court in the backyard and I got one quote for like $2100...Then I knew for sure I needed to go around and get some other quotes...so I took about 8 quotes in total, cheapest one came out to $1200. Although the quality wasn't as impressive as the guy that quoted me $2100, but I thought to myself, "Hmm if I can show this quote to the $2100, I'm willing to stay around $1400"...

 

So I did just that..contacted the $2100 and after some talking, I was able to get it down to $1400. He told me he was low on work that week... so he was willing to do this for me at that price and we agreed on it. (I mean, worst case senario I would have gone to the $1200 Quote and screw the other ones).

 

Sometimes, I think Ford should do the same thing with the UAW..."this is our best quote.. cant you top it? If not, then go $%^ yourself"...

[sparks will fly]

There are lots of things Medicare doesn't cover. Which means that GM and Ford end up paying the bill. If you look, the portion of retiree costs that is causing them trouble is MEDICAL costs, not pension benefit (i.e., the monthly check mailed to the home) costs.

 

Whether health care costs for retirees are driving the figure to $81 an hour, I don't know, but it could be one explanation.

 

And the goverment hasn't figured out how to cope with an increasing life spans...which is why Social Security is under stress. People are retiring at the same age, but living longer. It is not uncommon for people to retire at 65 and live for 30 more years. It was uncommon in the 1930s, 1940s and 1950s.

 

Have you ever dealt with medicare? I did when my dad was sick and his insureance payed about 40% of the cost going through a battle with bone cancer. No matter what the cost GM and Ford are only paying what they have to. Oh my father was not a Ford employee.

 

$81 an hour is bogus period. Like Pioneer said will someone PROVE IT. Show us on official corporate memo or in a shareholder package or even a SEC filing and we will agree.

 

The government has tried to figure this out that is why the age for benifits has gone up and will continue hoping to only pay for our sorry asses over the short term, they and the companies want us to last less than 5 years when we walk out the door, that way they make money.

 

I was getting a quote to put up a fence and some lighting around the tennis court in the backyard and I got one quote for like $2100...Then I knew for sure I needed to go around and get some other quotes...so I took about 8 quotes in total, cheapest one came out to $1200. Although the quality wasn't as impressive as the guy that quoted me $2100, but I thought to myself, "Hmm if I can show this quote to the $2100, I'm willing to stay around $1400"...

 

So I did just that..contacted the $2100 and after some talking, I was able to get it down to $1400. He told me he was low on work that week... so he was willing to do this for me at that price and we agreed on it. (I mean, worst case senario I would have gone to the $1200 Quote and screw the other ones).

 

Sometimes, I think Ford should do the same thing with the UAW..."this is our best quote.. cant you top it? If not, then go $%^ yourself"...

 

Went cheap uh.

[mettech]

Please note that the $81/hr AVG rate includes health care and retirement cost along with bring home pay. It is used as a standard benchmark. IT IS NOT BRING HOME PAY!!!

 

What does the UAW say a worker overhead cost is for GM and Ford?

 

GM spent 5.6 Billion for health care in 2005 for its workers. Add retirement, hourly wage, vacation and union dues... it adds up...

[RichardJensen]

Does anyone else understand how the penion funds work? I have tried on here before with no luck, Duh.

I don't remember the price of all those companies all together but as much as Jac spent R&D sure could have stayed in front of anyone.

1) Pension funds.

 

Ford, at any given moment, knows pretty much exactly how many retirees and widowed spouses it has. They also know how many current employees they have.

 

When an employee is hired, Ford, essentially, has to set aside a certain amount of money per year, for that employee, in order to fully fund his/her pension. The amount depends on when Ford expects that employee to retire, and how long the employee is expected to live after retiring.

 

Ford continually adjusts employee retirement and longevity expectations. They also continually adjust the expected rate of return on their pension fund.

 

The value of the pension fund, is based on complicated statistical formulas that represent the present value of all known future pension obligations, based on an assumed rate of return.

 

The best example of this, simplified, is an annuity.

 

You pay a lump sum, and are guaranteed an annual payment of a certain amount for a certain period of time. The lump sum is smaller than the total of annual payments because that lump sum is invested, and it increases in value during the time you are receiving the annuity.

 

When a pension is underfunded, the 'lump sum' in the annuity illustration is insufficient to guarantee the annual payments promised, at the assumed rate of return.

 

On publicly traded corporations, this underfunded pension liability is subtracted from shareholder capital (book value).

 

2) Hourly costs:

 

These numbers are derived from certain assumptions:

 

Using Ford data from their 2005 annual report

 

$2.856B in pension benefits to retirees and spouses

$1.6B in contributions to pension plans

$3.5B in health care costs for all US employees and retirees.

 

Total comes to $7.956B for all U.S. employees

 

If you can supply the number of U.S. employees, and U.S. production numbers, you can find out how much Ford pays per employee in extra benefits, and per vehicle.

 

The number is high enough to suggest that the figure of between $65-70/hour is accurate (including payroll taxes, workmans comp, and UI).

 

However, that number unfairly includes retiree costs as part of current employee costs.

Edited September 7, 2006 by RichardJensen

[RichardJensen]

BTW those numbers are for both white and bluecollar workers

[sparks will fly]

BTW those numbers are for both white and bluecollar workers

 

You finally said it, they base these cost on both hourly and salary yet they tell the public it rests on the shoulders of the union hourly employee. Nothing like putting a spin on it now is there?

 

Please note that the $81/hr AVG rate includes health care and retirement cost along with bring home pay. It is used as a standard benchmark. IT IS NOT BRING HOME PAY!!!

 

What does the UAW say a worker overhead cost is for GM and Ford?

 

GM spent 5.6 Billion for health care in 2005 for its workers. Add retirement, hourly wage, vacation and union dues... it adds up...

 

NO SHIT! I thought they were keeping $51 an hour from me. That is one of my knocks on the UAW anyway, most if not all trade unions (electricial, plumbers, pipefitters, millrights, etc.) run thier own healthcare and pension plans. It is still part of the package in wages but much smaller, with union dues paying the rest. The best part about it another member of the union (elected official) useally does a good job of managing these funds reporting to the rank and file monthly.

[mettech]

BTW those numbers are for both white and bluecollar workers

 

Wrong... The data is for "hourly" workers only. It may also include "bonus" money too.

Edited September 7, 2006 by mettech

[mettech]

More information about the hourly wage pay. It appears to be less than $81.00.hr:

 

...."GM has complained that it needs the high-profit vehicles to support its expensive labor costs, as well as its legacy costs — pension and retiree health benefits. The total hourly cost for a GM factory worker, including wages and fringes, is about $73, a U.S. Securities and Exchange Commission filing showed...."

 

U.S. Securities and Exchange Commission filing showed

[NJSteve3]

Whether it's 42 dollars or 81, it's still a heck of a lot more than Toyota and others are paying in their US, non-union shops. I'm all for the workers trying to get their hands on as much of the pie as possible, that's part of capitalism, but the compensation disparity is the biggest factor dragging the domestics into the abyss - sucking dollars out of design, engineering, and content. I'm not a union hater - dad was a Teamster, I've been a member of several unions - but a compromise is in order, and I do not hear the auto unions moving anywhere near halfway.

 

Too bad; I like the domestics, and it will bug me when I only have foreign makes to choose from.

[grbeck]

Have you ever dealt with medicare? I did when my dad was sick and his insureance payed about 40% of the cost going through a battle with bone cancer. No matter what the cost GM and Ford are only paying what they have to. Oh my father was not a Ford employee.

 

$81 an hour is bogus period. Like Pioneer said will someone PROVE IT. Show us on official corporate memo or in a shareholder package or even a SEC filing and we will agree.

 

The government has tried to figure this out that is why the age for benifits has gone up and will continue hoping to only pay for our sorry asses over the short term, they and the companies want us to last less than 5 years when we walk out the door, that way they make money.

Went cheap uh.

 

Yes, my grandmother needed rehabilitation in a nursing home after she broke her hip. Medicare only paid so much...the rest came out of her pocket.

 

As for your statement, "No matter what the cost GM and Ford are only paying what they have to" - that doesn't prove that it isn't retiree medical costs that are driving the figure to the quoted $81 per hour (or the $73 per hour quoted by NJSteve3).

 

Of course GM and Ford are paying what they have to for retiree medical benefits - they are bound by the UAW contract. I wouldn't expect them to pay more - they are for-profit companies, not charitable organizations.

 

It doesn't change these facts:

1. it is a huge cost; 2. that it is putting them at a competitive disadvantage; 3. that it is rapidly becoming a cost that they cannot afford; 4. that it might be sufficient to drive the total wage package to $81 or $73 per hour.

[RichardJensen]

Wrong... The data is for "hourly" workers only. It may also include "bonus" money too.

Those figures, the several billion dollars in payouts and contributions, are directly from Ford's Annual report, and they are explicitly stated to be for "U.S. employees"

 

Officer level payouts, while generally considered to be ridiculously high, are a drop in the bucket compared to the $8B Ford paid for regular white and blue collar employee BENEFITS. Wages are not expensed out separately in the annual report.

[ZanatWork]

I guess Pioneer will now proclaim the SEC as "outright liars"....

[RichardJensen]

It would be more fair to point out that 1) the legacy costs for white collar workers are also high (many of them retired on pensions as generous as UAW employees), and 2) 'salting the UAW leech' will not drastically alter Ford's present and future legacy obligations.

 

Ford simply needs to improve productivity numbers. High legacy costs do not reduce money available for R&D, as proven by Ford's higher R&D budget, vs. Toyota.

 

A Ford that can be profitable under the extremely taut operating conditions in place today, can be extremely profitably when materials prices decline (as they evenutally will), and as Ford's legacy obligations move toward more sustainable levels.

[mettech]

Those figures, the several billion dollars in payouts and contributions, are directly from Ford's Annual report, and they are explicitly stated to be for "U.S. employees"

 

Officer level payouts, while generally considered to be ridiculously high, are a drop in the bucket compared to the $8B Ford paid for regular white and blue collar employee BENEFITS. Wages are not expensed out separately in the annual report.

 

The report notes that the data is for "hourly wage workers".

[RichardJensen]

The report notes that the data is for "hourly wage workers".

From the annual report:

 

NOTE 23. RETIREMENT BENEFITS

 

Employee Retirement and Savings Plans

 

We have two principal qualified defined benefit retirement plans in the United States. The Ford-UAW Retirement Plan covers hourly employees represented by the UAW, and the General Retirement Plan covers substantially all other Ford employees in the United States hired on or before December 31, 2003. The hourly plan provides noncontributory benefits related to employee service. The salaried plan provides similar noncontributory benefits and contributory benefits related to pay and service. Other U.S. and non-U.S. subsidiaries have separate plans that generally provide similar types of benefits for their employees. We

established, effective January 1, 2004, a defined contribution plan generally covering new salaried U.S. employees hired on or after that date. Ford-UAW Retirement Plan expense accruals for UAW-represented Ford employees previously assigned to Visteon Corporation ("Visteon Hourly Employees") were charged to Visteon Corporation ("Visteon"). Pursuant to definitive agreements with Visteon signed on September 12, 2005, these charges were discontinued effective October 1, 2005.

 

For our plans that provide benefits based on salary, we project employee future salary growth for such salary-related benefits. Certain of our defined benefit pension plans provide benefits that are not based on salary (e.g., U.S. Ford-UAW Retirement Plan, noncontributory portion of the U.S. General Retirement Plan, and Canada Ford-UAW Retirement Plan). The salary growth assumption is not applicable to these benefits.

 

Plan obligations and costs are based on existing retirement plan provisions. No assumption is made regarding any potential future changes to benefit provisions beyond those to which we are presently committed (e.g., in existing labor contracts).

 

Numbers I have cited are under this note, which explicitly states that data is provided for BOTH hourly and salaried employees.

[mettech]

This is from the General Motors web site:

 

....."The average labor cost per hour for the U.S. hourly work force, which includes both wages and benefits, was $78.39 in 2003.".....

 

 

It is not hard to belive that in 2006, the cost is aroun $81.00.

 

GM Web Site Labor Cost in 2003

[RichardJensen]

This is from the General Motors web site:

 

....."The average labor cost per hour for the U.S. hourly work force, which includes both wages and benefits, was $78.39 in 2003.".....

 

 

It is not hard to belive that in 2006, the cost is aroun $81.00.

 

GM Web Site Labor Cost in 2003

I'm going to guess that those numbers are similar for salaried workers. It's irresponsible of GM to make it seem like this is strictly a UNION issue. As though salaried workers get tossed out the door at 65 with nothing more than a piece of cake, a balloon, and a 'good luck' card.

[sparks will fly]

It would be more fair to point out that 1) the legacy costs for white collar workers are also high (many of them retired on pensions as generous as UAW employees), and 2) 'salting the UAW leech' will not drastically alter Ford's present and future legacy obligations.

 

So do you really think saying that the cost to build a car for a worker is 73 or 81 or whatever when the spin is the union worker to the media? These companies are spinning this into poor us look what the workforce is doing to us when THEY still make more than all of us talking about it on this thread combined. WAKE UP they are F'n us not them.