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November 2008

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Subject:
From:
Pete Houwen <[log in to unmask]>
Reply To:
TechNet E-Mail Forum <[log in to unmask]>, Pete Houwen <[log in to unmask]>
Date:
Fri, 21 Nov 2008 12:02:40 -0600
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It goes beyond the UAW for sure, but an interesting number:

Hourly North American labor cost, GM: $81
Hourly North American labor cost, Toyota: $35

There's about $2K extra in every GM (Ford, Chrysler) car for labor.  All else 
being equal, consumers will spend $2K less.  So, Detroit needs to cut corners, 
and still sell small cars at a loss just to compete, meaining they need to sell 
more high margin SUVs (still at that disadvantage with more cut corners) to 
make up for it.  So some of those poor decisions and lowered quality are 
effectively a matter of unmanageable labor costs.  

And considering you can't incentivize the workers by firing the bad ones and 
promoting the good ones, all you have are inspirational posters.

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