How Germany builds more cars than US while paying twice a much to workers!
In 2010, Germany produced more than 5.5 million automobiles; the U.S produced 2.7 million. At the same time, the average auto worker in Germany made $67.14 per hour in salary in benefits; the average one in the U.S. made $33.77 per hour. Yet Germany’s big three car companies—BMW, Daimler (Mercedes-Benz), and Volkswagen—are very profitable.
How can that be? The question is explored in a new article from Remapping Debate, a public policy e-journal. Its author, Kevin C. Brown, writes that “the salient difference is that, in Germany, the automakers operate within an environment that precludes a race to the bottom; in the U.S., they operate within an environment that encourages such a race.”
There are “two overlapping sets of institutions” in Germany that guarantee high wages and good working conditions for autoworkers. The first is IG Metall, the country’s equivalent of the United Automobile Workers. Virtually all Germany’s car workers are members, and though they have the right to strike, they “hardly use it, because there is an elaborate system of conflict resolution that regularly is used to come to some sort of compromise that is acceptable to all parties,” according to Horst Mund, an IG Metall executive. The second institution is the German constitution, which allows for “works councils” in every factory, where management and employees work together on matters like shop floor conditions and work life. Mund says this guarantees cooperation, “where you don’t always wear your management pin or your union pin.”
READ LOTS MORE: http://www.forbes.com/sites/frederickallen/2011/12/21/germany-builds-twice-as-many-cars-as-the-u-s-while-paying-its-auto-workers-twice-as-much/
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yourout
(8,717 posts)
dipsydoodle
(42,239 posts)without taking into consideration numerous other factors.
rfranklin
(13,200 posts)There is no excuse for not doing so. Unless you can come up with those numerous other magical factors.
dipsydoodle
(42,239 posts)pay those rates and see how many cars you can sell in the USA for the prices used in Europe which are c. 40% higher than in the USA. Next up be prepared to pay European prices for homes and European prices for food. etc etc etc.
Beginning to see what I mean now ?
FreakinDJ
(17,644 posts)
Rosa Luxemburg
(28,627 posts)and their cars do more miles per gallon (or Km/L)
DissedByBush
(3,342 posts)That's how they measure their mileage.
It's a good way to measure it too, correlates more to how much it costs to run a car than mpg.
Rosa Luxemburg
(28,627 posts)Boston_Chemist
(256 posts)The USA has never been a worker friendly country. IN fact, you might say that the USA's labor history has been uniquely brutal towards workers. The gains that allowed so many in the Blue collar labor force to make it into the middle class are in the process of disappearing, and the middle class is disappearing.
Our nation has taken a turn for the brutal, and there is no scarcity of sophists that are ever ready to silence any criticism of the system. Milton Friedmann was the top sophist of them all.
TBF
(35,555 posts)and your use of the Che avatar is insulting.
dipsydoodle
(42,239 posts)The only mistake Cuba made was not listening to Ernesto : he wanted them to go with China not Russia.
Sarah Ibarruri
(21,043 posts)dipsydoodle
(42,239 posts)you both increase labour rates to Germanys level and your total production to their level too.
Who did you have in mind to sell the cars to?
rfranklin
(13,200 posts)We are after all, the greatest nation with the smartest, most exceptional people.
dipsydoodle
(42,239 posts)The issue is that generally speaking the US has built cars to suit its own market. The Germans build cars to suit world markets.
Having said that I may be a fine one to talk - I drive a Wrangler Sahara Unlimited. However - Ive got the diesel one which you cannot get over your side.
Doctor_J
(36,392 posts)and their children and parents. Auto workers and their families could afford a new car every 2-3 years instead of driving the same one for 12 years.
Middle class expansion = economic growth, Milton
msongs
(73,042 posts)FreakinDJ
(17,644 posts)Just ask Greece how well Milton's crap has worked out for them
lib2DaBone
(8,124 posts)We could have a high wage.. High Tech economy. It's a choice.. and leadership vision.
Our politicians who are bought and sold by Corporations are the ones who want us to be trapped into a low wage, low tech society that uses prison labor, child labor and tax cheating to produce mega profits for the benefit of off-shore corporations.
Our Congress and Senate are Ball-less, gutless and corrupt.. as they sanction this rape of American Workers.
When will it stop? Not soon.. as witnessed by the violence against OWS.
TreasonousBastard
(43,049 posts)our system sucks for the workers while theirs is pretty good, it has to be noted that BMW, Mercedes and Porsche don't sell cheap cars. Volkswagen makes a lot of its cheap cars in eastern Europe and has Audi to make the big bucks st home.
So, they can pay twice as much when the product sells for much more than twice as much.
Having said that, it is true that historically our labor relations have been far too adversarial. Japan and Germany are both culturally oriented toward cooperation and get a huge advantage from that. We are more like the British, where every little thing is a major battle-- and look where their auto business went.
If fault must be assigned I suppose it's with the bosses, since they called the shots and refused to talk until forced. But, we are far past the point where assigning blame accomplishes anything-- what to do about it is the big question.
boppers
(16,588 posts)So, does UAW have the leverage to fight for actually making better products? If they have that leverage, are they using it?
Scuba
(53,475 posts)gas mileage
lifespan
financing
maintenance
etc.
Without these elements, one cannot say their cars are more expensive than others.
patrice
(47,992 posts)(and) "The second institution is the German constitution, which allows for “works councils” in every factory, where management and employees work together on matters like shop floor conditions and work life. Mund says this guarantees cooperation, “where you don’t always wear your management pin or your union pin.”
The German solution to what in the U.S. amounts to charges of union-corruption, workers sold out after the fact and BEFORE "the deal" gets to rank-and-file members' table.
no_hypocrisy
(54,180 posts)Seems to me that in this country the shareholders' interests always outweigh the workers'.
Lasher
(29,377 posts)That is a huge problem among publicly traded corporations in the US.
muntrv
(14,505 posts)not as ridiculously high as the US?
boppers
(16,588 posts)
James48
(5,081 posts)While it is true that CEO pay is obscene, Politi-FACT-CHECK rates that particular chart, with it's allegation of 475:1, as false.
Source:
http://www.politifact.com/truth-o-meter/statements/2011/oct/10/facebook-posts/viral-facebook-post-ceo-worker-pay-ratio-has-obscu/
Here's one they cite at "only" 185-298:1.
http://stateofworkingamerica.org/charts/ratio-of-average-ceo-total-direct-compensation-to-average-production-worker-compensation-1965-2009/
Lasher
(29,377 posts)Have you seen what they have selected as the number one lie of the year?
DFW
(59,711 posts)There are several factors to consider. First off, most workers at Daimler-Benz or BMW cannot afford
the products they make. Company cars make up a LOT of German domestic consumption due to tax
laws that favor them. Daimler and BMW have factories elsewhere (e.g. Alabama and South Carolina)
to offset domestic costs. If exports were to drop off, especially to countries with a lot of corruption
and new oligarchies (Russia, China), ALL German car manufacturers would be in trouble. Germany's
domestic market could never absorb their production.
The councils between workers and management are the big key. Strikes hurt both--in an export
driven economy a very serious deal. Strikes in a sector like that hurt Germany's economy very
badly, and lead to losses and hiring freezes.
Take into account, too, the exchange rate--the euro is still over $1.30, which skews things.
Also--Germans pay higher income taxes than we do, and have a 19% sales tax on everything,
which takes a bite out of every income, but hits lower-income people hardest. At $67 per hour
with their 37 hour work week, that's $129,000 a year. That puts you close to the 49% income
tax bracket in Germany, when you include all surcharges, and your employer had better sell one
HELL of a lot of cars if he is to continue to afford that.
One of the weirdest things in Germany--and probably the single reason that wind energy doesn't already
account for more energy production: in Germany sitting members of the Parliament are allowed to serve
on the boards of directors of corporations (!!!!!!!!!!!). Imagine a bunch of Republican Senators and
Congressmen sitting on the board of directors of Exxon-Mobile (not that half of them aren't in their
pockets already).
Lasher
(29,377 posts)It justifies those higher taxes you mentioned.
DFW
(59,711 posts)Not the part of Germany I live in, that's for sure.
France and England do have a kind of universal health care, Germany does not. It has an odd
patchwork network of different kinds of agencies, companies and organizations that are designed
to make sure everyone has some kind of health insurance, but even in Germany there are people
without health insurance. You have to be some kind of lazy idiot to be uninsured in Germany, but
there are some who fall through the cracks, and there is still the two-tier level of care--first class
with little to no waiting if you are "privately insured," which means you pay out of your pocket up
front and submit the bill to your insurance carrier after for reimbursement, or second class
(Kassenpatienten), which means the doctor, clinic or pharmacy submits the bill to a big insurer, and
gets paid later--often much later, which is a burden to physicians, hospitals and pharmacies who have
to pay their employees on time regardless.
Lasher
(29,377 posts)On closer reading it looks like individual mandate to me - which in my opinion is not universal health care. Traditional Medicare for all is what I think of as universal health care.
and-justice-for-all
(14,765 posts)I am not sure what DFW is talking about.
http://ireport.cnn.com/docs/DOC-549374
http://www.commonwealthfund.org/~/media/Files/Publications/Chartbook/2007/May/Multinational%20Comparisons%20of%20Health%20Systems%20Data%20%202006/Cylus_multinationalcomparisonshltsysdata2006_chartbook_972%20pdf.pdf
http://content.healthaffairs.org/content/13/4/22.full.pdf
I would be rather pleased if the US had a similiar set up.
leveymg
(36,418 posts)Germany's economy is oriented toward production of goods, while the US economy is dominated by financial interests.
Yet, it turns out that the US version also makes inferior profits as well as products.
FourScore
(9,704 posts)
dmallind
(10,437 posts)The totals exclude light trucks (including SUVs and crossovers on truck platforms) - a huge segment of the US market and a negligible one of the German. The US produces more passenger vehicles than Germany.
Secondly the number of temp workers in German car factories is hugely in excess of the ratio in the US, where our unions keep them out. They are not paid near as much as employees.
Thirdly anyone who has seen union contracts in both countries will attest that they are very different animals - far less restrictive limits on hours, production rates and so on. That management/union collaboration thing is real - but it works both ways.