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Automotive News & Views Inside Line Article Comments Article Comments: Perception Is Reality
149 messages, Last post on Feb 12, 2007 at 1:54 PM
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Article comments for Perception Is Reality - Witness the tale of two companies — Toyota and General Motors. Despite recalls and public relations woes, Toyota's image of bulletproof quality persists, and sales and market share rise. Despite concrete evidence to the contrary, GM's reputation for inferior quality remains, while sales and market share decline. (more)
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Replying to: rockylee (Dec 22, 2006 11:44 pm) What is going to be the determining factor of the market value ? The threat of organizing a non-union plant often increases the blue collars market value. What if there were no unions to keep the market value for laborers high ? Would somebody at a non-union Toyota plant assembling a car still make $22 an hour ???? I think not !!!!!  I think without the threat of unions the blue collar workers in america would be hosed. They would be paid slightly above somebody working at a fast food joint. White collar workers in lower-middle management would also lose some pay and benefits to adjust to the market. Does the "market value" include foreign labor like somebody in china making $0.40 an hour ??? If not then why ? You are gradually seeing "market value" labor being lowered for all americans because of global labor competition in both blue and white collar jobs.  Lots of different number for hourly wages floating around. There are lots of expenses in running a business. Here is an example. Hourly $20.00/hr with 2080 hours in the year. Add in 40% for benefits thats $58,240.00 or $28.00/hour. That sounds about right. Then explain to me why the big 3 throw out numbers ranging from $45-90 bucks an hour for union labor ???? Even including the under funded pension doesn't add up to the hourly wage numbers they often quote in the paper. Add in 120 hours paid vacation and 72 hours for holidays your up to $30.03 because you really only work 1888 hours. True.....Throw in a pension fund contribution over 30 years and if invested properly the interest alone should cover a good chunk of the employees retirement. Look at General Electric..... There pension fund costs the company nothing today because they invested money into the fund back in the 1930's and now it has growin to nearly $30 Billion and makes enough money its self supporting and continues to grow each passing year. I'd say the actual cost per GM employee with benefits is somewhere between $45-$65 an hour. Not no $70, $80, $90, an hour. I think the number is much closer to $45 an hour than $65 an hour even with the legacy costs. the fact remains the company can spin the numbers to make them look good or bad. Lets say it cost $5,000/mth to heat and cool the building where 500 people work. Another $2,000/month for water & sewer. Another $2000/mth for cleaning and maintenance. Now its up to $30.13. so on and so on thats why there are so many numbers. Well when you start adding those factors to it then sure you can make the numbers look ugly. Maybe thats also what GM/Delphi did ? However does managements usage of the facility's decrease that number off the hourly ? I would love to have more facts on GM's problem where can I get the facts. Anything but a UAW link they are as far to one side as GM is to the other. It would be very hard to get a unbiased opinion from a independant source to crunch the numbers. Rocky
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Replying to: rockylee (Dec 22, 2006 11:54 pm) What is going to be the determining factor of the market value ? If I quit my current job I can get a new job in the same area making ~%90 of my current pay. I am close to "Local Market Value" I could move to a bigger city and make more but the additional money would be absorbed by the increase in the cost of living. If a certain job pays $10.00/hour and nobody is willing to do the job for that price the market value will go up. But if 50 people are willing do do the job for that price the market value will go down. Organizing a Union allows them to increase wages (a strike or threat of) but it has not increased the market value. If a union employee is making $25/hour and 50 unemployed folks are willing and able to do that job for $15/hour then $15 is the market value. But the company can't terminate the union employee and hire at market value. That sounds like extortion to me. The threat of organizing a non-union plant often increases the blue collars market value It increases the wages, not the market value. That is the problem. Does the "market value" include foreign labor like somebody in china making $0.40 an hour ??? Yes, but with oversea manufacturing you have to factor in tariffs, the cost of building a new plant, shipping back to the US. However does managements usage of the facility's decrease that number off the hourly ? No it increases the number. Management is probably considered an overhead expense. Example: I work for company X. Our skilled labor cost ~$30.00 hour. Add in benefits and it becomes. $42.00 We have a fleet of vehicles for our labor that adds $6.00/hour = $48.00. We use material to maintain equipment that adds $5.00/hour = $53.00. We have buildings for our labor that adds $2.00/hour = $55.00. Add in the accountants, lawyers, managers, human resources, IT, telecomm, etc. And the final wage comes to ~$85.00/hour. Everyone working for a company that is not actually making product is an overhead expense. Accountants, lawyers, managers, human resources, IT, telecomm are not making products but they are needed to run the business. So you can add one employee and your overhead may go down, but add 10 employees and you may need more building space, another manager, an extra accountant etc. White collar workers in lower-middle management would also lose some pay and benefits to adjust to the market. Yes, and overhead expenses would also go down. Then GM could build a Tahoe using better material for the same price and possibly compete with the Asians.
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Replying to: k2j (Dec 23, 2006 5:52 am) We only impose tariffs on steel in this country. pretty much everything else is "free" or should I say exempt of tariffs. Rocky |
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Replying to: phinneas519 (Sep 24, 2006 3:45 pm) The non-dealer has to set the low price to compete with the heavily discounted new car price. Otherwise why would anyone buy a used car? |
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