Interesting Read.

Average Pay I'm assuming:

UAW:$60.00
CAW:$51.05
Non-Union:$42.24

Time for Vehicle Build: (Not sure how they determined this...)
UAW:Not Given (We probably don't want to know...)
CAW: 27.43 Hours
Non-Union: 22 Hours

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Canada's labour advantage gone
Daimler data show U.S. plants building Japanese models have competitive edge

By GREG KEENAN

Friday, May 27, 2005 Updated at 4:12 AM EDT

From Friday's Globe and Mail

A vaunted Canadian advantage in labour costs at vehicle assembly plants has evaporated and turned into a cost penalty that threatens to soar, according to data in a DaimlerChrysler Canada Inc. document assessing the auto maker's competitive situation.

DaimlerChrysler Canada's assembly plants are operating at a disadvantage of $8.81 (U.S.) an hour, compared with U.S. plants operated by the three largest Japan-based auto makers, company data show. Labour costs are $51.05 an hour in U.S. dollars at Canadian plants versus an estimated $42.24 at Honda, Nissan and Toyota plants and compare with an advantage Canada held from 1998 to 2002.

"Our Canadian labour costs, including time off, health care and wages have been rising 5.8 per cent annually for a decade," DaimlerChrysler Canada spokesman Stuart Schorr said yesterday.

"For Canada to maintain or grow its auto export industry, the manufacturers and CAW have a shared responsibility to keep labour costs from growing even more uncompetitive."

The North American market now has six strong competitors battling it out in every segment.

The DaimlerChrysler information suggests coming labour negotiations between the Canadian Auto Workers union and the three Detroit-based auto makers will focus more than ever on major restraints in wages and other benefits.

The labour talks kick off in July and will conclude this fall.

Jim Stanford, CAW economist, said the labour cost numbers make sense to him, but pointed out that unionized Canadian plants have lower costs than similar operations in the United States.

The DaimlerChrysler data confirm that, showing estimated hourly labour costs of $60 at U.S. plants last year, giving Canada a $9 an hour advantage on U.S. plants represented by the United Auto Workers.

"They've zeroed in on this one comparison [with Japan-based companies] that I think is relevant, but doesn't tell the whole story," Mr. Stanford said.

"When you look at the whole picture, including labour costs, productivity and quality, Canadian plants are still competitive."

While not commenting on the DaimlerChrysler data, General Motors of Canada Ltd. president Michael Grimaldi agreed that Canadian operations need to focus on costs.

"This cost-competitiveness issue is a global issue," Mr. Grimaldi said yesterday after addressing The Globe and Mail's editorial board in Toronto. "This isn't competitiveness north and south of the border," he said.

Soaring U.S. health care costs, for example, are seen only as an issue there, but they're rising in Canada as well, even with Canada's taxpayer-financed health care system. "We are an integrated company," he said. "Opportunities and problems in the U.S. are Canada's opportunities and problems as well."

Mr. Stanford noted, however, that the increase in the value of the Canadian dollar has made a major impact on Canada's competitive position.

"The fundamental reason the Canadian advantage ended after 2002 is because the dollar went from a 63-cent average that year to 80 cents today," he said. "There's nothing we can do about that."

The comparison between Canadian unionized plants and U.S. plants operated by the three largest Japan-based auto makers highlights a critical element hovering over the talks between the Big Three and the CAW.

That is the tectonic shift in North America over the past several years that has turned the vast middle of the market into a combat zone dominated by the Detroit three and the Japan three, but with Hyundai Motor Co. of South Korea lusting to join in.

The minivan segment, a market DaimlerChrysler dominated in the 1990s and one that contributed to gaudy profits that decade, illustrates how competitive the market has become.

DaimlerChrysler makes minivans in Windsor, Ont., that go up against minivans made by Ford in Oakville, Ont., GM in Georgia, Honda in Alabama, Toyota in Kentucky and Nissan in Mississippi.

The average wage for CAW members assembling minivans in Windsor was $51.05 (U.S.) last year and it took 27.43 hours on average to put one vehicle together, DaimlerChrysler data show. That gave the Windsor plant a labour cost of $1,400 for each minivan.

Honda, by contrast, paid $42.24 an hour to workers at its minivan plant in Lincoln, Ala., and it used 22 hours to assemble one vehicle. That put Honda's labour cost at $929 for each minivan, a $471 advantage over Chrysler.

The amount of time off that workers get in Canada virtually wipes out the advantage of taxpayer-financed health care, said industry analyst Felix Pilorusso.

For example, CAW members with 20 years of service are entitled to 451 hours a year away from the job in the form of vacations and other time off. That's the equivalent of 11 40-hour weeks. The comparable figures for Toyota Motor Manufacturing Canada Inc. are 408 hours, while UAW members at U.S. plants receive 334 hours of time off or about eight weeks.

Workers at Honda Motor Co. Ltd., Nissan Motor Co. Ltd. and Toyota Motor Corp. U.S. plants receive a maximum of 288 hours or seven weeks.

 

http://web.camaross.com/forums/showthread.php?t=370575

 

Crap, I'm a RETARD! LOL

 

I guess the bigger issue exposed is the $18/hr disadvantage UAW US plants have vs. non UAW US plants.

 

Well, at least we haven't heard any tirades about cheap Mexican labor in a while.

 

Average pay plus benefits. The hourly rates for UAW vs. non-UAW in the US is fairly close; it's the benefits that really increase the cost of UAW labour.

 

unions will be the death of american manufacturing and blue collar jobs. they need to be abolished NOW.

 

Lol I hope you were being sarcastic.
I think unions are going a little too far now.
But they are still essential.
Does anyone remember what working conditions and wages were like before unions stept in?

 

i'm 100% serious...unions had their time and place decades ago...they are useless with modern workplace laws and business models and are a primary source of many failed and failing corporations.

if you study side-by-side comparisons of the most well run business and those in most fincial dire, you will see a common thread of unions in many of the ones in trouble while the best performing companies are union free.

 

let's see if a UAW worker costs $60.00 hr and a non union worker costs $42.24 there is a difference of $17.76 hr.

Now lets guess that a car take 28 man hours to build. That gives a difference in costs of $497 more at the UAW plant.

Does $500 really mean that much on a $20k car?

If you went into a dealer and saw a car you wanted at $22,000 and another car you did not want at $21,500 which one would you buy?

Is the extra $500 what is hurting the big three? Or is it that they arn't making something people want to spend the $$$ on?

 

 

werd...additionally, union labor in notoriously less efficient and less productive than non, therefore on a MACRO scale the $500/car mentioned above, plus lack of productivity, plus benefits becomes millions and billions over time.

 

You're looking at it the wrong way. $500 is cost, not sell price. An additional $500 of variable cost translates to at least double that in sell price. Many retail car deals fall through for a difference of $500, let alone $1000.

GM sells about 4,000,000 cars in the US each year. $500 per vehicle is $2 billion additional cost per year. Given that GM does not have enough market power to pass along cost increases (their prices have actually been inching lower over the past few years), they cannot recoup their costs even if they are higher than their competitors. So they must eat it. How do you feel about a $2 billion hit to GM's bottom line.

 

This also mentions that UAW empoyees pay NONE of their health care. This I am guessing is more important to GM...as pretty much everyone anymore has to pay some of their healthcare.

 

And there, I suspect, is what the whole "labor issue" boils down to.

Labor should have the same health care benefits as white collar workers. If white collar workers are paying a portion out of pocket, it's only fair labor should have the same plan.

I feel if GM went about it straightforwardly instead of hitching their profitability to this (which isn't honest), I think they would have more success and public support than the tire old "blame unions" tirade.