Friday, December 5, 2008
Auto Workers Real Wages
The average GM assembly-line worker makes about $28 per hour in wages, and I can assure you that GM is not paying $42 an hour in health insurance and pension plan contributions. Rather, the $70 per hour figure (or $73 an hour, or whatever) is a ridiculous number obtained by adding up GM's total labor, health, and pension costs, and then dividing by the total number of hours worked. In other words, it includes all the healthcare and retirement costs of retired workers.
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This figures are not important. The only number that means anything is the cost of benefits allocated to each car built compared to the cost of benefits per each car built by foreign competitors.
It is a fact that up to a little over a year ago GM was paying 100% with no contributions for all of their retired workers.
These costs are not ridiculous if they have to be paid. They are expenses that go against revenue. They cannot be disregarded from a bottom line profitability perspective and for you to worry about the way a number is presented is ridiculous.
Costs are costs and if a company that is bleeding money cannot increase it's revenues and decrease it's costs than it needs to cease doing buiness.
This is from someone who has many relatives who are retired and living off of the GM Corporate Nipple.
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