[Pen-l] labor and the auto companies
From: Rudy Fichtenbaum <[EMAIL PROTECTED]> Date: Thu, 20 Nov 2008 00:49:37 -0500 User-agent: Thunderbird 2.0.0.17 (Windows/20080914) -------------------------------------------------------------------------------- We keep hearing from conservatives and even a number of liberal commentators that the reason the big three auto companies are not competitive is because of high labor costs due to the fact that their workers are unionized. I just looked at Compensation (Payroll plus Benefits) as a percent of the Value of Shipments for Automobile and Light Duty Motor Vehicle Manufacturing in the Annual Survey of Manufacturers. Compensation for all workers, not just production workers is about 7.2% of the Value of Shipments. Of course this includes both transplant as well as the "big three." Assume for a moment that GM, Ford and Chrysler accounted for 50% of auto sales and their labor cost was 50% higher than the transplants. That would imply that Compensation for the big three was about 9% of sales compared to 6% for the transplants. That would make labor costs about 7.5% for the industry average. If that were the case and we cut labor costs at the big three in half that would reduce the cost of producing an automobile by 4.5%. Does anyone seriously believe that this would make the big three competitive? Doesn't this expose the myth that the problems of the big three are due to high labor costs? Am I missing something? Rudy -- Rudy Fichtenbaum Professor of Economics & Chief Negotiator AAUP-WSU Department of Economics Wright State University Dayton, OH 45435 Phone: 937-775-3085 Fax: 937-775-2441 This message has been scanned for malware by SurfControl plc. www.surfcontrol.com _______________________________________________ Marxism-Thaxis mailing list [email protected] To change your options or unsubscribe go to: http://lists.econ.utah.edu/mailman/listinfo/marxism-thaxis
