The real cost of unionized auto workers? $70/hour? Try $38!

[Joanne98]

There are plenty of people in this country who would desperately love to see all unions go away. Over the course of the congressional hearings on an automaker bailout this week many of those people have continually brought up the un-cited "fact" that UAW workers get $70/hour in wages and benefits as opposed to about $40 or so for non-unionized workers at the foreign owned transplants. While the UAW and the Detroit automakers have made more than their share of mistakes and deserve a good chunk of the blame for what is happening, there is a major problem with this particular argument. IT'S NOT TRUE!

UAW members do not take home $70/hour. That is the automaker's cost per active employee. What's the difference? The latter figure is total spent by automakers on wages and benefits divided by the number of active employees. The cost of benefits includes the pensions and health care costs for the hundreds of thousands of living retirees in addition to active workers. Those punching the clock every day, don't get a dime of that. As of last year, UAW workers made an average of $28/hour in wages + $10/hour in benefits. The rest went to retirees, a cost that is borne by the automakers. The reality is that unionized and non-unionized autoworkers actually make very similar wages and benefits. Continue reading after the jump.

http://www.autoblog.com/2008/11/23/opinion-the-real-cost-of-unionized-auto-workers-70-hour-try/

[floridablue]

1. How many man hours per automobile ?

Is the labor cost per vehicle really that much of a factor ??? I knew a company that outsourced when labor was only 5% of the product cost. They paid that much on additional transportation costs.