Heritage Foundation: UAW Workers DO Cost $70/hr.
Yes, yes, The Heritage Foundation. Right wing whack jobs. But TTAC is open to arguments from all ends of the political spectrum, from Prius-driving socialists to S65 AMG-driving free marketeers (I’m looking at you Shoes). As always, you’re free to make of this what you will. “The Detroit automakers explain in their SEC filings that their benefit expenses are for current workers, not former employees. This is because they follow generally accepted accounting principles in preparing these estimates. If the figures did include current retiree benefits, the average hourly amount would be much higher than they actually report. UAW employees earn far more than most Americans do.” So, now how much do they pay? “Chart 1 shows the average hourly compensation for UAW workers and the average compensation for all private sector workers. These figures are based upon calculations by the Detroit automakers themselves as published in SEC filings, their annual reports, and other materials. According to briefing materials prepared by General Motors, “The total of both cash compensation and benefits provided to GM hourly workers in 2006 amounted to approximately $73.26 per active hour worked.”
The Heritage Foundation has little time for the contention that legacy costs account for the $70/hour number. “These benefits cost the Detroit automakers significant amounts of money. Critics contend that these benefit figures include the cost of providing retirement and health benefits to currently retired workers, not just benefits for current workers. Since there are more retired than active employees this makes it appear that GM employees earn far more than they actually do. This contention contradicts the plain meaning of what the automakers have reported in SEC filings and in their public statements and would be contrary to generally accepted accounting principles.
“Chrysler, for example, reports paying $20.14 an hour in health costs for its hourly employees. That figure includes the estimated cost of their health benefits in retirement, calculated according to Financial Accounting Standard 106. The government does not allow Chrysler to promise to pay tens of thousands of dollars in health benefits in the future without reporting that cost on its balance sheets today.”
Bottom line?
“Congress should not tax all Americans to bailout the Detroit automakers in order to preserve high earnings for a few.” Nope, nothing contentious there.
[thanks to Robert Schwarz for the link]
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Another classic case of GM shooting themselves squarely in the appendage.
You have a compound problem.. when you solve a problem artificially. Dad goes to work for GM.. GM pays him good money... Dad has no reason to improve himself or the company... Dad get promoted and now makes decision due to seniority rather than education or merit. Son watches dad and says why stay in school and drops out to join GM. Now we have uneducated dad and uneducated son making cars for the us consumer who is much more educated thanks to the internet and Google. My friends and I went to school... we fight for every job we get.. we keep improving our selves every day and fight against other companies both US and foreign. The fear of loosing our jobs and loosing our footing on the job, this keeps us sharp. We need the fear of god put into the US workers... for that I am willing to endure a long and hard recession. We are being taken by German and Japaneese who have high costs of labour... wait till we get the Korean now followed by Chineese and Indian cars in a few years.