|At Nissan Japan, they make about $24 an hour:
"The union negotiates annual raises, but each worker can haggle for individual performance-based raises at Nissan. Averaging $2,870 a month with an additional $17,200 average bonus a year, Nissan workers make way over the nation's overall average of $2,260 per monthly paycheck. Workers with special skills like Kanazawa make more.
Union talks earlier this year added an average $54 to the monthly paycheck. Nissan covers 80 percent of workers' medical bills, entitles workers to 20 vacation days, and adds up to $49 in extra compensation a month for dangerous and skilled jobs."
Detroit's labor problems have to do not only with overly high benefits and work rules that reduce productivity and add cost, it's also got to do with grass cutters being defined as (and paid like) autoworkers:
"Take grass cutting. As defined by the current United Auto Worker contract negotiated with the "Big Five" (GM, Ford, Chrysler, and top parts makers Delphi and Visteon), an auto "production worker" is a job description that covers anything from mowing grass to cleaning the toilets. In the real world, these jobs would be outsourced to $8 an hour, no-benefit wage earners, but on Planet Big Five, these jobs get the same wages as any auto line-worker: an average $26 an hour ($60,000 a year) plus benefits that bring the company's total cost per worker to a staggering $65 an hour.
But at least the grass cutters are working for their pay. The UAW contract also guarantees that 12,000 autoworkers get full wage for doing nothing. On the heels of Miller's straight-talk, the Detroit News reported that "12,000 American autoworkers, instead of bending sheet metal, spend their days counting the hours in a jobs bank." These aren't jobs. And they certainly aren't being "lost" to China.
"We just go in (to Ford's Michigan Truck Plant) and play crossword puzzles, watch videos that someone brings in or read the newspaper," The News quoted one UAW worker as saying. "Otherwise, I've just sat."
For Delphi, this idled labor cost $400 million in the second quarter of this year alone. Facing similar numbers until the contract's end in 2007, Delphi took refuge in bankruptcy. "The jobs bank must be eliminated," says Miller. "Paying people not to work is just not sustainable."
As the auto companies have increased productivity through automation, the UAW calculated that jobs banks would make it too expensive for automakers to close plants and lay off workers. While that plan has worked, it has severely damaged the long-term viability of the industry — and by extension, future job creation. It also led to this week's GM bloodbath, as the company struggles to close a wage gap with American internationals (foreign automakers manufacturing in the U.S.) that now stands at $1319 per vehicle produced."
Because Detroit spends more on labor than Japan, and has to sell for lower base prices, the difference shows up somewhere. That somewhere is lower quality parts that break a lot faster. You don't always get what you pay for, but you never get what you don't pay for. And when you buy a Detroit car, you are not paying for quality - you are paying for grass cutters and janitors to get auto worker wages.
Think of this the next time you drive a Detroit car and it breaks on you. It's got nothing to do with bad luck and everything to do with Detroit's corner cutting to make up for its high cost labor force. Replacing parts won't help, since Detroit's partsmakers operate under the same UAW rules that resulted in substandard parts (via corner-cutting to remain price-competitive with Japanese makes) in the first place. I am certain that Detroit could make a high quality sub-compact car for $25,000. But foreign makes are selling them for $15,000.