Detroit automakers paying same as foreign rivals ($14 an hour for new hires)

[Omaha Steve]

Source: AP

By DEE-ANN DURBIN

DETROIT (AP) -- After years of paying their U.S. manufacturing workers more than their foreign rivals, Detroit's automakers are now paying the same amount as foreign companies and could even achieve a labor cost advantage in the next few years, an economist with the Center for Automotive Research said Monday.

Sean McAlinden said that in 2007, General Motors Corp. was paying $1,400 more per vehicle than Toyota Motor Co. in North American labor costs, primarily because of a $950 charge for retiree health care coverage.

But that same year, historic labor negotiations cut costs and transfered the responsibility for retiree health care to a trust run by the United Auto Workers union. The UAW agreed to cut wages in half, to around $14 an hour, for new hires and also cut their pension and health benefits.

Before GM and Chrysler Group LLC went into bankruptcy protection last summer, workers agreed to additional concessions, including reduced overtime and cost-of-living adjustments and the elimination of a jobs bank that paid workers who were laid off. Ford Motor Co., which didn't seek bankruptcy protection, couldn't convince its workers to match those concessions.

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