GM, Ford, Toyota, Honda...Who will sell you your next car?

mikesright

The playing field is not level, people! Have you seen the news? The big three (and GM especially) have huge numbers of retirees, and are forced to pay their workers 3x what the Japanese do. While a much more efficient worker in Smyrna, TN will get paid, at most, $23/hr, a GM worker will be paid roughly $60/hr to do the same work, and since GM has an older, more tenured workforce, add on to that by a few $$$.

I read in the Wall Street Journal today, that one of the most profitable car makers in the world, Nissan, is treating its 500?!! retirees in the US with capped medical insurance. While GM is doing the same thing, it has MILLIONS of retirees that it has to do this for!

Yes, GM, Ford, and DCX should spend much more on car development, but they cannot, since the roughly $2500/car disadvantage has to come out somewhere. Even better is the government's treatment of these companies.

All the big three want is to preserve jobs and benefits. As the forigners come in with none of the cost structure and plenty of Japan's incentives, favorable currency exchange, no tariffs (i've heard that one a few times and will try to dig up information for y'all), no unions, etc, it is only natural you will have a better time of getting better product out.

They have all made huge strides in product lately, even as these forigners dig in on their pie now, and now command much higher quality ratings, power, efficiency, etc; and now the public does not give any credit to them, and continues to buy from the Japanese.

Look where GM does not have a massive cost structure to support, in places like China. The Japanese have no presence there!

The point of all of this is, before you look at the big 3 with disdain, look at their products, look at the company and the workers, too. They are literally shackled to a ball of unsurmountable costs, and being thrown overboard by a government willing to let them drown while welcoming the Japanese, Koreans, Chinese, etc on a more than fair to them playing field.

I know where I'm buying my next car, and they don't have an N, T, or H as the first letter!

socala4

The big three (and GM especially) have huge numbers of retirees, and are forced to pay their workers 3x what the Japanese do. While a much more efficient worker in Smyrna, TN will get paid, at most, $23/hr, a GM worker will be paid roughly $60/hr to do the same work

Where did you get the idea that GM plant workers are getting paid $125k per year? ($60 per hour X 2080 hours per year = $124,800.) Provide a source for that incredible factoid, please.

As the forigners come in with none of the cost structure and plenty of Japan's incentives, favorable currency exchange, no tariffs...

When the dollar was weak during the 1980's, the Big 3 still lost market share. The dollar is now relatively weak again, and the Big 2.5 are still losing market share.

And in any case, the "Japanese" automakers get no currency benefit from their US operations. They make sales to dealers in US dollars, pay US suppliers with US dollars, pay American workers with US dollars, and pay US taxes with US dollars. The more operations that they offshore to the US, the less benefit and risk are derived from exchange rates.

As for tariffs, GM and Toyota have the same exact tariffs -- none. How would slapping a tariff on one and not on the other create a "level playing field" when only one of them would have to pay it?

snakeweasel

So who will sell your car and why

Well as things sit now they will be in order

Huyndai - Me and "She who must be obeyed" have two with no real issues. Mine is still going great at 130+k miles. So since we have good luck with them they get extra points

Ford - "She who must be obeyed" wants a ragtop and likes the Mustang. While the Milan really has caught my eye

Chrysler - Again "She who must be obeyed" wants a ragtop and likes the Sebring.

Other than that nothing really is standing out. But then again we are not looking and once we do the list will most likely grow/change. Or maybe it will change if I get to the Auto Show next week.

rockylee

Mike you are very right and went into specific detail of WHY !!!!!! Thanx for the good message.

Rocky

snakeweasel

You can not rely soley on Carfax to find out about a used car there are to many variables.

I have heard a few to many stories about Carfax having the wrong info to trust them to much.

snakeweasel

That has happened to some of the employees the UAW has interviewed.

I would take the UAW's word of this with a big grain of salt. Unions don't exactly play on the up and up and have been known to lie, cheat and steal to get what they want.

snakeweasel

Had it not been for the voluntary quotas that restricted imports during the 1980's, Detroit and Dearborn would probably have even less market share.

That is debatable. The quotas more than less likely hurt Detroit in the long run.

rockylee

Hell you could say that just about anyone or any company.

Rocky

snakeweasel

True but some are worse than others.

jlawrence01

Where did you get the idea that GM plant workers are getting paid $125k per year? ($60 per hour X 2080 hours per year = $124,800.) Provide a source for that incredible factoid, please.

$65/hr is a fully loaded (wage and fringe incl pension and medical benefits) has been well documented by the Detroit News **AND** the Wall Street Journal.

2080 hours would vary by plant and demand.

snakeweasel

$65/hr is a fully loaded (wage and fringe incl pension and medical benefits)

Just providing no benefits you will pay an additional 25% or more for payroll taxes, unemployment insurance and workmans comp. Health insurance alone can increase costs by as much as $5/hr.

socala4

You are correct that this is a figure that GM cites as being its overall cost.

While I don't deny that labor is a significant component of its total cost, the same is true of any manufacturer. Let's put that in perspective:

-The average wage at GM is reportedly about $27-31 per hour, depending upon the source to which you refer. $60 per hour is a gross overstatement of the wage component.

-In Ohio, Honda employs about 16,000 people and pays $11 billion per year in wages. Calculate this, and you end up with average wages of about $69,000 per year, or wages of about $33 per hour.

-Toyota claims that its overall payroll and burden costs for labor in the US are about $48 per hour. Meanwhile, NPR reports that some plant workers in the Toyota plant in Kentucky make wages of $70-85,000 per year, or about $34-41 per hour for at least some of those employees.

So ALL of the automakers have relatively high costs -- that's the price of doing business when operating a complex manufacturing facility.

Meanwhile, none of that explains how GM managed to make bad acquisitions and investments (ask yourself if the Saab or FIAT deals were good for the bottom line), design unreliable cars, or badge engineer to excess and with mediocre results (i.e. the redundancies across the product lines). It doesn't explain why GM elected to buy Hummer, while Toyota opted to build hybrids.

And none of that explains why GM makes cars with increasingly less demand among a public more interested in the alternatives. You can villify the unions or the Japanese as you like, but at the end of the day, not many people want a poorly designed, unreliable car.

rockylee

WOW. That's some facts and figures pal.

Rocky

globalhobo

Is it fair to force American Companies to pay Federal and/or State minimum wages, comply with OSHA & EPA regulations, accept unions under local laws, etc. and not require Foriegn companies to adhere to these requirements but give them equal access to USA markets??? (I realize autoworkers get more than minimum wages.)

Over the last 50 years overseas shipping costs have collasped, (often due to containerized freight), so U.S. companies have to find an edge elsewhere. The U.S. Military Industrial Complex takes the best and brightest engineering minds away from U.S Consumer goods manufacturing. How many Japanese and Korean engineers are working on new cruise missle designs?

We need a level playing field for the auto industry. Sure you can talk all you want to about safety, comfort, on-star gadgets, horse power, whatever. Anyone who has ever owned a car with serious mechanical problems knows that reliability is NUMBER ONE in their next car buying decision.

I am saddened to think of all the people I know who would not even consider buying a GM or Ford product. After they have struggle for years with breakdowns and repair ripoffs I cannot blame them when their neighbor's Hondas last for decades without much trouble.

American Car Co's please stop wasting big bucks on advertizing and study the car repair records from your dealerships to identify all the vehicle flaws and constantly, constantly, constantly improve quality and reliability.

Saturn builds in modern, southern plants, with new designs and models, why are they not selling well? Quality is the answer folks. (Their cars are modiocre compared to the competition.)

Another pet peeve; car names. Who comes up with these? "LaBaron" sounds like some old dead fat European aristorcrat. "Lucerne" is a dairy company to most Americans, not some fancy Swiss mountain town.

I owned a '92 Ford Taurus 3.8 Liter. After 50K miles the transmission went out, the cooling system leaked, and the paint faded. I signed up for a Citibank Ford 5% rebate card and then Ford canceled that after I racked up $800 toward a new car purchase. The Ford Explorers were purposely designed with centers of gravity to high to look macho, but very unstable. Ford model's Firestone tires blow out. Why should I buy another Ford???

The foreign cars and companies have problems also. But if Toyota can build great cars so can GM

carlisimo

"Is it fair to force American Companies to pay Federal and/or State minimum wages, comply with OSHA & EPA regulations, accept unions under local laws, etc. and not require Foriegn companies to adhere to these requirements but give them equal access to USA markets??? (I realize autoworkers get more than minimum wages.) "

Everyone that builds here has to pay minimum wages and comply with regulations. No automaker is forced *by the government* to use union labor. A long time ago, workers unionized, the Big3 started dealing with them, and since then they've been bound together by contract.

For the most part, it IS a fair market. Cars built in Japan, Germany, or Korea are built with different regulations and wages, but (in Germany and Japan at least) conditions are very similar to ours. In third world countries it's different, but the Big3 are probably using third world labor more than anyone else.

The dollar vs. yen thing isn't so fair. But the Feds choose to keep things the way they are, because overall it's advantageous for us. Not for the car industry... but they've decided that it's better for the economy the way things are now. I don't know economics well enough to argue.

canddmeyer

GM, Ford, Toyota, Honda..:Who will sell you your next car?

Honda will sell me another Accord.....Toyota or GM will sell me another midsize SUV. GM would have sold me my last SUV if the TrailBlazer hadn't been the industry leader in recalls.

rockylee

2007 Trailblazer/Envoy promises to be much better from What I hear.

Rocky

jlawrence01

The average wage at GM is reportedly about $27-31 per hour, depending upon the source to which you refer. $60 per hour is a gross overstatement of the wage component.

The $65/hour includes the cost of wage and fringe costs which is the most accurate way to look at the labor costs. Pensions and medical costs must be recognized in the period which they are incurred.

canddmeyer

Despite most uninformed posters blaming the UAW for GM's woes, GM still pays MORE retirement benefits yearly to its 450,000 former management employee's than it does to its 1-million plus UAW retiree's. This post is not directed to where the reply is attached, but facts need to be known.

rockylee

I heard that from my grandfather and it's never mentioned among the biased media. I couldn't remember the exact amount and thank-you very much for bringing that stat up. :shades:

Rocky

mirth

...includes health care, pension, and other benefits. So $125K per employee sounds right. Probably only about $65K or so of that is salary.

snakeweasel

While what you say is true it appears that a lot of these comparisons are done comparing GM's total cost of wages (salaries, payroll taxes, insurance and benefits) against only the salary component of another company. Thats how you get silly little comments like "While a much more efficient worker in Smyrna, TN will get paid, at most, $23/hr, a GM worker will be paid roughly $60/hr to do the same work"

snakeweasel

GM has 365,000 union retirees.

rockylee

Come on people....please....Where do you get these figures ??????? $125K a year with all wages, benefits, pensions. My father pension as it stands is $1700 a month "if"/when he retires in 3 years. The Railroad "BNSF"
health benefits with their pension is under $23K a yr. The Railroad pension per month is more than double that of my fathers. These $125,000 per year wage and benefit figures are grossly inflated like a hot-air balloon

BTW-If GM would take $10-20 Billion and invest it like GE they would have a self supporting balloon. GE has made Billions on it's pension fund and it's self supporting and a money maker for GE.

Rocky

socala4

Yes, and Toyota incurs average costs (payroll and burden) of $48 per hour. (That's $100k per year based upon a forty-hour week.) Does that sound cheap to you?

Let's consider this -- while Ford and GM look to Mexico to cheap labor, Toyota and Honda continue to build plants in the US, even though it could pay Mexicans a fraction of that wage. Why aren't they leading the charge to take advantage of cheaper labor by outsourcing most of their work to Mexico, as have VW and Ford?

Obviously, it is possible for automakers to afford relatively high US wage rates and associated costs...particularly when they use those workers to build products that consumers actually want.

andre1969

once you factor in what they pay in Social Security (remember, your company puts in half, and you put in half), 401k match, leave, health insurance (fairly cheap for me because I'm single), and the life insurance policy they have offered me, it would inflate my salary by about 20%. I dunno if I'm leaving out anything there. They also pay for college courses, so I'm sure that would get factored in to "total" compensation as well, even if I don't use it.

carlisimo

I think it's a lot higher than that. My company charges $69 an hour for me (as an engineer) and I get about 40% of that as salary.

snakeweasel

there is a difference between what the total cost of labor is and what you charge for a contractor. Not only does your company have to pay the total cost of labor (salary, payroll taxes, unemployment taxes, and the like) but they also have to pay overhead, non direct labor and make a profit. You really cannot compare the two.

carlisimo

Yeah, you're right. Sorry, brain-wracking couple of days for me. Still, I thought benefits would come closer to actually equaling salaries, than being roughly 20% of them.

snakeweasel

well that would depend on the benefits and the salary. If a company pays your health insurance that health insurance doesn't change as salaries change. The more you make the less % of your salary is in health insurance. On the flip side such things as matching 401K funds it will change as your salary changes.

But just the basics of payroll taxes (FICA), unemployment and workmans comp. can add up to 20% or more. I have seen workmans comp. get as high as 40% of salary (but that was a high risk company). Also remember that workmans comp. for an assembly line worker is going to be more than a desk jockey.

varmint

For every job the domestics have lost, the implants have added one back.

When you figure in cost of living for the areas where the implants have built their assembly lines, pay rates are pretty much even with UAW jobs.

The difference is simply that the implants use more modern benefit packages like 401K plans, profit sharing, healthcare co-pays... and, of course, fewer legacy costs. But those legacy costs will pale in comparison with the domestics because the plans they offer are less reliant on the company coffers.

rockylee

When you figure in cost of living for the areas where the implants have built their assembly lines, pay rates are pretty much even with UAW jobs.

However paying a worker $16.36 an hour vs. $26+ for a Big 2.5 gives the implants a $10 or better cost savings on hourly salary alone. Factor in benefits and that cost advantage is even further apart. The million dollar question is if the U.S. keeps on this current path of eliminating the middle class, then who's going to buy the expensive products being produced such as cars ?????
I guess by then the Chinese and Japanese will beable to buy the Camaro's, GTO's, HD Trucks instead of us.

Rocky

socala4

Robert Walberg of MSN Money had this comment about GM last November. I'd say that he hit the nail squarely on the head:
___________________

GM can streamline its operations all it wants. But if it can't streamline the design of its cars, improve sales and grow its market share, all the restructurings will be for naught. What really ails GM is not the high costs of operations but an unfocused, unattractive and uninspiring assortment of cars that leaves a growing number of consumers uninterested.

Don't get me wrong. Monday's cost-cutting announcements improve the company's chances of returning to profitability sooner rather than later. It was especially encouraging to see management and labor working together amicably to reach an agreement on reducing health-care costs. That's a big change from the past, and shows that both sides recognize they need one another to survive.

At some time, GM management needs to focus on the larger picture, and that's how to recapture market share from foreign competitors. The company bet on big trucks and SUVs to return it to glory at a time when oil prices were just about to shoot higher -- a big mistake that many of its foreign competitors did not make. Now it must backtrack, downsize and retool to meet the growing demand for sleeker, more fuel-efficient vehicles.

No real fix in sight

For the better part of two decades, the company has been chasing rather than leading the market. That failure rests squarely with management. Unfortunately, the current team doesn't seem any better equipped to deal with the company's long-term problems than its predecessors. It spends too much time pointing fingers and making excuses and not enough time innovating and inspiring.

With the health-care crisis abated (at least temporarily), the financial exposure to Delphi's bankruptcy factored in and cost-cutting plans put forth, management should have no more major distractions. It's time now to deliver on a new line of automobiles that win the heart and minds of consumers worldwide.

GM's stock might go up another 10% or more on the hope that tomorrow will be better than today. But this is one investor who won't bite. Until management proves that it knows how to do something other than cut costs, GM's future isn't likely to improve. It might not lose $1.6 billion next quarter or the quarter after that, but make no mistake about it: GM is a broken company with no real signs of getting healthy.

Show me sustained market share gains and I'll jump back on board. Until then, I have no more interest in playing the stock than I do in playing a game of three-card monte.

"General Motors' big scam"
___________________

Incidentally, one of Edmund's own analysts made very similar comments in respect to GM's woes. They can cut and outsource all they like, but unless they make products people want to buy, it will be for naught. If it fails to do so, that will largely be on the shoulders of management.

socala4

However paying a worker $16.36 an hour vs. $26+ for a Big 2.5 gives the implants a $10 or better cost savings on hourly salary alone.

Where did you get that figure? I just showed you data that says that you've lowballed it considerably.

ontop

Also remember that workmans comp. for an assembly line worker is going to be more than a desk jockey

Its actually called 'workers' compensation' not workman's comp, but I guess you knew that considering you know everything else.

If GM call sell you a car at a good price, who cares what they paid to make it? Kinda like Hyundai. You know they can't be making money undercutting CamCords.

varmint

"However paying a worker $16.36 an hour vs. $26+ for a Big 2.5 gives the implants a $10 or better cost savings on hourly salary alone."

Suspect figures aside, that's not an unfair advantage. It's just good business sense.

"The million dollar question is if the U.S. keeps on this current path of eliminating the middle class, then who's going to buy the expensive products being produced such as cars ?????"

Hello? The middle class jobs being lost by the domestics are being replaced with the middle class jobs added by the implants.

rockylee

Auto worker A: $16.36 an hour with co-pay insurance and money getting set aside for 401K doesn't equal exactly middle or does it ????

Auto Worker B: $26 an hour with full benefits and pension + less money going to 401K (because 401K isn't main source for retirement) who's going to have more disposable income to buy products and services ?????

- Yes this based on equal cost of living area.

Rocky

varmint

"$16.36 an hour with co-pay insurance and money getting set aside for 401K doesn't equal exactly middle or does it ????"

$16.36 is a bogus number. And, yes, the (real) wages paid by the implants do rate as middle class income in places like Mississippi, Kentucky, Texas, Alabama, etc.

Just the other day the Detroit News had a story about a single mom who was in debt with things looking grim for her kids. She got a job working at an implant line and now is saving money to put her kids into college.

socala4

Auto worker A: $16.36 an hour with co-pay insurance and money getting set aside for 401K doesn't equal exactly middle or does it ????

Auto Worker B: $26 an hour with full benefits and pension + less money going to 401K (because 401K isn't main source for retirement) who's going to have more disposable income to buy products and services ?????

I'd really like to know where you got these figures. These don't match the figures I've found in NPR news reports, a study by the Wharton School of Business, and a press release from Honda.

rockylee

I was told that by a person who applied at the San Antonio Toyota plant. He said that was the starting wage ($16.36) and it took you like 5 years to reach the top. That also depended on how well you can brown nose jokingly. It's based on merit and that merit is judged by your supervisor.

Is he wrong ????? I am going off of what he said. Perhaps it's different for each plant and it's location ???? :confuse:

Rocky

socala4

I was told that by a person who applied at the San Antonio Toyota plant. He said that was the starting wage ($16.36) and it took you like 5 years to reach the top.

Comparing the starting wage for one job in one Toyota plant to the average wage across all of GM's US plants doesn't seem quite fair, doesn't it? Assuming most people increase their pay over time, wouldn't you presume that the starting wage is going to probably be lower than the average wage anywhere you'd go?

rockylee

Yes it was unfair comparison. I apologize. The starting wage when I applied at GM assembly plant 4-5 years ago was $18 an hour. I'm not sure what it is today. Delphi got a 2 tier system implemented a while back. My aunt started this past Monday at Delphi and is currently making $14 an hour.

Rocky

explorerx4

what vehicle you are inclined to buy next.
there is a lot of interesting stuff being posted, but it belongs somewhere else.
years ago, my wife drove a perfectly good sho, but drove by a saab dealer every day on her way home from work.
pretty soon, we had a saab.
a chevy dealer just opened that i drive by every day.
now i'm eyeing this impala. :confuse:

w9cw

As an average, $14/hour to start ($29,120 per year assuming the normal 2,080 hours per year)is really not a bad starting wage. It certainly may not be what most people desire, but I know my neice with a B.A. and a teaching certificate started at considerably less than that last August as a new high school teacher. Of course, she also has around $60,000 college loan debt to pay off too!

rockylee

Take one (impala) for a test drive pal. Your not obligated to buy one.

For myself I'm going to wait and see. I'm liking the upcoming CTS-V, G8, and praying to god my dream car the Buick Velite Roadster get built. The new Escalade got priced out of my budget.

Rocky

rockylee

$60K in loans.....OUCH !!!!!

Rocky

rockylee

What Impala trim are you liking the best ????

Rocky

snakeweasel

Its actually called 'workers' compensation' not workman's comp,

Actually both terms are interchangeable.

Kinda like Hyundai. You know they can't be making money undercutting CamCords.

Their profits are up.

explorerx4

i don't know what trim it is, but it has bright exhaust tips. that is enough to get me interested. they don't put them on the base models.

oskwi

Teaching in the south I presume?