Union says labor is only 10 percent of car costs

[Omaha Steve]

http://www.mlive.com/newsflash/business/index.ssf?/base/business-12/1186328399102070.xml&storylist=autonews2

Union says labor is only 10 percent of car costs
8/5/2007, 11:20 a.m. EDT
By TOM KRISHER
The Associated Press

DETROIT (AP) — As bargainers for the United Auto Workers and the domestic automakers try to reach a new contract agreement, Kenneth Cooksey is one of many workers who doesn't understand why the companies are so focused on the cost of labor.

By most accounts, labor expenses for General Motors Corp., Ford Motor Co. and Chrysler amount to about 10 percent of the price of a new vehicle, including wages, benefits and "legacy" costs for retiree pensions and health care.

So Cooksey, a 37-year Ford worker from Detroit, doesn't buy the companies' logic that they have to erase a roughly $25 per hour labor cost gap with their Japanese competitors — Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co.

"We can't help it because the foreigners don't have the legacy costs because they just came over," said Cooksey, who works at a plant just west of Detroit that assembles the Focus small car.

Nissan, Honda and Toyota all pay about the same wages as the Detroit Three. The companies say the cost gap comes in other areas such as health care for active and retired workers, absenteeism, paid days off, and the jobs bank, in which workers get most of their pay when laid off.

By some accounts, the biggest chunk of that $25 the companies want to shave is in retiree health care.

FULL story at link.

[AndyTiedye]

1. It Isn't The Labor Costs, Stupid GM/Ford Bosses! Try Building Cars that Get Decent Mileage