Ford Hourly Costs $8-20 Higher than VW?

[Wesley Mouch]

While the roughly $57-an-hour wage and benefit costs Ford spends per UAW worker is less than the $75 an hour it was spending a decade ago, it is still between $8 and $20 an hour higher than Honda or Volkswagen AG

Article in the WSJ shows why Ford is looking at other options for satisfying worldwide demand for its cars. Is $57 a living wage? Is it not enough? Or is it too much? Should the UAW accept less to keep Detroit's automotive manufacturing alive, and help Detroit establish a new manufacturing base again?

[RO_Resident]

Article in the WSJ [[ http://www.wsj.com/articles/ford-to-...u-s-1436463445 ) shows why Ford is looking at other options for satisfying worldwide demand for its cars. Is $57 a living wage? Is it not enough? Or is it too much? Should the UAW accept less to keep Detroit's automotive manufacturing alive, and help Detroit establish a new manufacturing base again?

$57 is the hourly cost per worker, not an hourly wage. Freshly hired workers have tiered wages. FCA has been able to take advantage of the tiered wage system more than the other Detroit producers.

Under the current contract, hourly workers start at $15.78/hour, and go up to $19.28 after 4 years.

On the flip side, the Detroit 3 support the largest private health care pool in the world.

Some sources:
http://www.freep.com/story/money/bus...tion/70335462/

http://www.cargroup.org/assets/files...dziczek_pm.pdf

[animatedmartian]

" $57-an-hour wage and benefit costs"
Pensions, healthcare, insurance, etc.

[emu steve]

I wonder about the $57 / hour total LABOR COST.

How much does say Ford pay for health insurance / hour. [[Total premium - employee cost) / 172 hours [[month). Isn't an excellent BC/BS package for a single worker, e.g., say $500 / month? Wouldn't that be $3 / hour with say Ford picking up $2 and the worker $1 on an hourly basis? Double that for a family plan. If hours work increase [[because of overtime) increase significantly the hours worked per month might go from 172 to say 200. Benefit costs would be divided by 200 hours.

I understand FICA, pension, etc. are significant expenses, but are health insurance, life insurance, etc. [[those kind of benefits) as expensive as portrayed????

Are our car companies 'going broke' because of two or three bucks / hour health care cost?

Isn't life insurance cost less than a dollar / hour? Really $172 - 200 / month employer cost??

So say $25 hourly + 8+% FICA, a few bucks / hour health insurance, 50 cents - 75 cents/hour life insurance, etc. That sounds less than $40 / hour...

I guess profit sharing is an expense [[spread over 2080 regular hours / year) of say one buck + per hour at FCA and say $3+ per hour at Ford.

[Dan Wesson]

While the roughly $57-an-hour wage and benefit costs Ford spends per UAW worker is less than the $75 an hour it was spending a decade ago, it is still between $8 and $20 an hour higher than Honda or Volkswagen AG

Article in the WSJ [[ http://www.wsj.com/articles/ford-to-...u-s-1436463445 ) shows why Ford is looking at other options for satisfying worldwide demand for its cars. Is $57 a living wage? Is it not enough? Or is it too much? Should the UAW accept less to keep Detroit's automotive manufacturing alive, and help Detroit establish a new manufacturing base again?

Ahh yes...

The Race to the Bottom.

Third world status here we come.

The endangered American middle class that is...

[emu steve]

While the roughly $57-an-hour wage and benefit costs Ford spends per UAW worker is less than the $75 an hour it was spending a decade ago, it is still between $8 and $20 an hour higher than Honda or Volkswagen AG



Ahh yes...

The Race to the Bottom.

Third world status here we come.

The endangered American middle class that is...

I agree with you.

We use the expression: "LCD" [[lowest common denominator) which is apparently Mexico and China [[and the like).

[BankruptcyGuy]

I wonder about the $57 / hour total LABOR COST.

How much does say Ford pay for health insurance / hour. [[Total premium - employee cost) / 172 hours [[month). Isn't an excellent BC/BS package for a single worker, e.g., say $500 / month? Wouldn't that be $3 / hour with say Ford picking up $2 and the worker $1 on an hourly basis? Double that for a family plan. If hours work increase [[because of overtime) increase significantly the hours worked per month might go from 172 to say 200. Benefit costs would be divided by 200 hours.

I understand FICA, pension, etc. are significant expenses, but are health insurance, life insurance, etc. [[those kind of benefits) as expensive as portrayed????

Are our car companies 'going broke' because of two or three bucks / hour health care cost?

Isn't life insurance cost less than a dollar / hour? Really $172 - 200 / month employer cost??

So say $25 hourly + 8+% FICA, a few bucks / hour health insurance, 50 cents - 75 cents/hour life insurance, etc. That sounds less than $40 / hour...

I guess profit sharing is an expense [[spread over 2080 regular hours / year) of say one buck + per hour at FCA and say $3+ per hour at Ford.

As I understand it [[and thank you for actually doing the math) the healthcare cost is something much more. I read an article from 2013 that health care costs would be about $11/hour in 2015.

[313WX]

While the roughly $57-an-hour wage and benefit costs Ford spends per UAW worker is less than the $75 an hour it was spending a decade ago, it is still between $8 and $20 an hour higher than Honda or Volkswagen AG



Ahh yes...

The Race to the Bottom.

Third world status here we come.

The endangered American middle class that is...

^^^Essentially this...

[aj3647]

The average starting wage for a college graduate is $45.478. That works out to an average hourly wage of $21.85. And that says nothing about benefits.

http://time.com/money/3829776/heres-...ut-of-college/

So objectively, is $19 an hour PLUS benefits an "unfair" compensation for a job that requires no skills and no education?

[ndavies]

Actually I would put the starting hourly wage for that college grad as less than that. Most college grads are going to be salaried employees, not hourly. They'll be expected to work more than 40 hours a week.

[313WX]

Actually I would put the starting hourly wage for that college grad as less than that. Most college grads are going to be salaried employees, not hourly. They'll be expected to work more than 40 hours a week.

And not to mention a college graduate, for several years or even several decades, will have to contribute a much larger chunk of their check to debt payments, unlike someone straight out of high school making $20/hr on the assembly line...

Also, unless they're lucky enough to land a salaried Big 3 automaker position, those same college graduates will also have to contribute a much larger chunk of their check to medical insurance [[since there are very few employers that have the cash flows Ford and GM have).

[ndavies]

And not to mention a college graduate, for several years or even several decades, will have to contribute a much larger chunk of their check to debt payments, unlike someone straight out of high school making $20/hr on the assembly line...

They also won't have a pension. They'll have far fewer vacation days. They won't have 16 holidays. They will have to contribute far more to their health care then the UAW does.

[Baselinepunk]

Article in the WSJ [[ http://www.wsj.com/articles/ford-to-...u-s-1436463445 ) shows why Ford is looking at other options for satisfying worldwide demand for its cars. Is $57 a living wage? Is it not enough? Or is it too much? Should the UAW accept less to keep Detroit's automotive manufacturing alive, and help Detroit establish a new manufacturing base again?

Poor ole Mooch sure stepped in it this time.

Reload, Mooch -- ya got another foot to shoot.

[Ltdave]

that might be the AVERAGE hourly cost per employee...

our plant [[not ford) likes to throw out "BURDEN RATE" which also includes the cost per hour per employee for running the plant...

we have a data center [[one of 3 in our company) that pays "rent" so to speak into the building fund which supposedly helps counter our electric bill [[for lighting, fans and running our air compressors), water bill and natural gas bill...

depending on how many employees they have in the plant will determine the plants burden rate. at one point my plant was saying it cost the company $99 an hour per employee. i havent heard what the figure is now but we have pattern makers [[3-D patterns for stamping dies) layed off and our total plant workforce is about 1/4 of what it was when i first started there in 1997...

we are all [[except a few laborers) skilled trades so our hourly rate is a little bit higher than production workers...

[Cincinnati_Kid]

But it's ok for Ford to pay the CEO's [[former and current) and other corporate talking heads millions in stock and salary.
Yeah, ok.....

[Cliffy]

Typical Mooch. Wants wages from India here in Detroit. Typical broke Republican.

[Patrick]

I wonder about the $57 / hour total LABOR COST.

How much does say Ford pay for health insurance / hour. [[Total premium - employee cost) / 172 hours [[month). Isn't an excellent BC/BS package for a single worker, e.g., say $500 / month? Wouldn't that be $3 / hour with say Ford picking up $2 and the worker $1 on an hourly basis? Double that for a family plan. If hours work increase [[because of overtime) increase significantly the hours worked per month might go from 172 to say 200. Benefit costs would be divided by 200 hours.

I understand FICA, pension, etc. are significant expenses, but are health insurance, life insurance, etc. [[those kind of benefits) as expensive as portrayed????

Are our car companies 'going broke' because of two or three bucks / hour health care cost?

Isn't life insurance cost less than a dollar / hour? Really $172 - 200 / month employer cost??

So say $25 hourly + 8+% FICA, a few bucks / hour health insurance, 50 cents - 75 cents/hour life insurance, etc. That sounds less than $40 / hour...

I guess profit sharing is an expense [[spread over 2080 regular hours / year) of say one buck + per hour at FCA and say $3+ per hour at Ford.

It's interesting the burdened rate for this type of work in the Midwest. The feds [[especially in the DC area) will pay a burdened rate of $95K for an admin. assistant contractor making $60K. Of course the staffing companies [[body shops) are making a big profit, but it's all so that they don't have to hire an actual fed employee. The only benefit to hiring a contract employee is that you can easily get rid of that person either by having the company remove the person, or simply not exercising the next option period.

[canuck]

The one good thing about the poorer state of the middle class is that there are fewer second cars, motorcycles, snowmobiles, and powerboats to clutter the atmosphere with fine particles. Fewer Corian countertops replacing outdated ones to occupy landfills and whatnot. The problem is that as the very wealthy extract the money, there is at least the effect of curbing consumption to a certain degree. If we were all a bit more conscious of the wastefulness we promote, and acted responsibly, higher wages might mean spending on more intelligent products and services. But then I'm sure the rising middle class in China is just as fucked up as we are in North America.

[313WX]

The one good thing about the poorer state of the middle class is that there are fewer second cars, motorcycles, snowmobiles, and powerboats to clutter the atmosphere with fine particles. Fewer Corian countertops replacing outdated ones to occupy landfills and whatnot. The problem is that as the very wealthy extract the money, there is at least the effect of curbing consumption to a certain degree. If we were all a bit more conscious of the wastefulness we promote, and acted responsibly, higher wages might mean spending on more intelligent products and services. But then I'm sure the rising middle class in China is just as fucked up as we are in North America.

^^^So now I see, this is what they call "polishing a turd [[or in this case, "turds")."

[Wesley Mouch]

It's interesting the burdened rate for this type of work in the Midwest. The feds [[especially in the DC area) will pay a burdened rate of $95K for an admin. assistant contractor making $60K. Of course the staffing companies [[body shops) are making a big profit, but it's all so that they don't have to hire an actual fed employee. The only benefit to hiring a contract employee is that you can easily get rid of that person either by having the company remove the person, or simply not exercising the next option period.

Having been an abusive manager of labor, I'll agree that 'easily getting rid' is valuable. But more valuable is 'does what you want'. Employees believe that they have rights to determine what is within their 'job description. Union employees collectively have those rights.

The right to control the workplace is much more important that wages. A union controlled workplace is much more likely to be Checker Cab than Uber.

[Dan Wesson]

Having been an abusive manager of labor, I'll agree that 'easily getting rid' is valuable. But more valuable is 'does what you want'. Employees believe that they have rights to determine what is within their 'job description. Union employees collectively have those rights.

The right to control the workplace is much more important that wages. A union controlled workplace is much more likely to be Checker Cab than Uber.

Oh my Gawd, Wes If you ain't smarter than me in the work place that thinking will get you no where.

There are way too many so called managers that can't do much else but do what their told.

The world is full of bureaucratic functionaries who promote mediocrity, embrace egalitarianism and **Snap** think they are all that.

Talk to the hand......

[313WX]

Having been an abusive manager of labor...

Interesting...

Certainly explains a lot...

[BankruptcyGuy]

I think the point of the article certainly is that hoping and wishing will not result in higher wages. Unless the higher wages lead to better outputs [[efficiency-wise), the company paying higher wages will have their lunch eaten by those who build the product more cheaply. You just can't mandate your way around it.

An example on a smaller scale is this story from San Francisco. Is there anyone who things that a 10% increase in prices won't result in lower sales, and ultimately, less of a need for employees? The same is true for cars.


http://www.eater.com/2015/7/10/89310...o-minimum-wage


San Francisco Chipotles have seen their prices go up by an average of 10.5 percent, compared to an average 0.5 percent increase at locations in other cities. Sharon Zackfia, analyst for investment firm William Blair, said in a report the steep San Fran increase is no coincidence.

"We believe the outsized San Francisco price hike was likely because of increased minimum wages [[which rose from $10.74 per hour to $12.25 on May 1) as well as scheduled minimum wage increases in future years."

[Dan Wesson]

I think the point of the article certainly is that hoping and wishing will not result in higher wages. Unless the higher wages lead to better outputs [[efficiency-wise), the company paying higher wages will have their lunch eaten by those who build the product more cheaply. You just can't mandate your way around it.

An example on a smaller scale is this story from San Francisco. Is there anyone who things that a 10% increase in prices won't result in lower sales, and ultimately, less of a need for employees? The same is true for cars.


http://www.eater.com/2015/7/10/89310...o-minimum-wage


San Francisco Chipotles have seen their prices go up by an average of 10.5 percent, compared to an average 0.5 percent increase at locations in other cities. Sharon Zackfia, analyst for investment firm William Blair, said in a report the steep San Fran increase is no coincidence.

"We believe the outsized San Francisco price hike was likely because of increased minimum wages [[which rose from $10.74 per hour to $12.25 on May 1) as well as scheduled minimum wage increases in future years."

Tell me then about this policy of relentless inflation and the affect on prices.
Why is it this yearly reset of the value of the currency is given a free pass.

[Marlon_JB2]

Labor costs aren't the problem that they make it out to be.

They're just the costs that they like to attack.

Labor costs are in the single digit percentages of the cost of a vehicle. [[It varies depending on company, vehicle, etc)

Myself, I am performing a good 40% more work than I was just 2 years ago.

Yet, making the same $19.28/hr.