Center For Automotive Research: Detroit Beating The Wage Gap

Edward Niedermeyer
by Edward Niedermeyer
center for automotive research detroit beating the wage gap

Speaking at the same Detroit conference on the auto bailout that Steve Rattner and Ron Bloom attended, the Center for Automotive Research’s Sean McAlinden proclaimed the end of Detroit’s era of unsustainable high wages. In 2007, said McAlinden, building a car in North America cost GM about $1,400 more per car than it did Toyota, thanks largely to a $950 health care charge. Since then, GM’s bailout and renegotiated wage and benefit contracts with the union have actually brought GM’s hourly compensation to just under what the CAR says the transplants pay. The AP reports that McAlinden’s estimate of GM’s average hourly worker salary is $69,368 while the transplant average is $70,185. Better still is McAlinden’s prediction that

between 2013 and 2015, Toyota could even be paying $10 more per hour than GM unless the Japanese company reacts and lowers wages.

And all it took was giving the UAW a $17.5 stake in the new GM!

Of course, there’s some question as to the veracity of anything that comes out of the CAR. Largely funded by unions and the Detroit automakers, CAR’s assesments have been plenty controversial in the past. This time though, it’s hard to see how cooking these numbers helps anybody. After all, the UAW hardly comes out of this looking like roses with its membership… unless we see these numbers used in a union counterattack.

And that’s not a scenario that’s entirely out of the question. After all, GM may be beating the transplants on hourly worker wages, but compare white-collar salaried employee compensation, and it’s clear that GM still pays its non-hourly workers quite well by comparison. According to McAlinden,

Salaried workers at the Detroit automakers made $122,963; at foreign competitors, they made $81,506.

That won’t make the union too happy. But then, they won’t really have much to say until their VEBA fund is able to monetize its stakes in GM and Chrysler. And if those stakes don’t yield enough cash to meet VEBA’s obligations, expect things to get nasty all over again. And then there’s the issue of pensions, which the GAO recently warned could compromise the whole auto bailout. It’s not clear if McAlinden includes these looming pension bills in his compensation analysis, but it’s likely he doesn’t considering GM has no public plan for how to deal with the looming crisis.

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  • Gimmeamanual Gimmeamanual on May 12, 2010

    There was a guy on here a while back that used to show that GM already spent a bit less than Toyota to build a comparable car (Malibu vs Camry), but GM's average transaction prices were WAY lower.

  • Joevwgti Joevwgti on May 13, 2010

    That's pretty hypocritical considering some GM parts, and even their cars aren't made in the USA. Chevy Aveo, anyone? Suzuki/Daewoo econobox much?

  • Tassos This is way too god damned OLD, 21 years old to have all the necessary options you need TODAY. You need a 10 year old or less car. AND if you give us THIS POS, a 21 year old model, that is not even a LUXURY car, whoever pays $10k for a Golf, And I Do NOT care what anniversary it is (they are all UTTERLY INSIGNIFICANT) deserves to get this MOST UNRELIABLE AND COSTLY TO REPAIR OF ALL LOUSY ECONOBOXES< EVEN THE DOMESTICS AND THE KOREANS.
  • Tassos As you say, Toyota confirmed this on TUESDAY. Today is WEDNESDAY. Why is everything on TTAC held back one or more days before you tell us the NEWS when it is NO MORE THE NEWS?
  • MRF 95 T-Bird You can find a decent and far more stylish Audi TT or an S4 of a similar vintage for under $10k.
  • RHD "In all situations, the grip of the tires (225/40R18 front, 225/35R18 rear) brings with it road noise."Are the rear tires actually smaller than the fronts??!! Adding just a bit of sidewall would take care of the bumps and rough ride. I'm not a fan of BMWs, personally, but this is a very enjoyable car. There are times when driving a convertible is pure bliss, and with a bit of power it's fun as well. (And certainly a better drive than a gussied-up, overpriced German taxicab!)
  • Bd2 The Equus was a decent 1st effort (not-withstanding the prior JV with Mitsu), but the interior was not quite up to par and the US engineers over-corrected the soft KDM suspension tuning.The current G90 is simply leap years ahead.