A study of labor costs among foreign automakers in the US shows a ten-dollar gap between the per-hour rates of the domestics and the imports. The difference between the Detroit 3 and their import competition equates to $250 more in labor costs per car for the domestics.
GM just ratified an agreement with the Canadian Auto Workers union, and as soon as it did, Chrysler blasted it for being "weak." Chrysler's complaint was that the CAW didn't offer enough concessions to bring production costs into line with market realities. Now Ford has piped up in Chrysler's corner, saying "We believe the recently negotiated agreement between General Motors Canada and the Canadian Auto Workers will not keep Ford's Canadian operations competitive in today's global economy."
Here's something you might have seen coming. We've talked about how labor costs have been one of the major factors cited as keeping the domestic automakers behind the 8-ball regarding profitability compared to Japanese competitors. Sure, there's more to it than that, but the fact remains that labor costs are high on the list. How does that effect foreign automakers that have domestic workforces? About how you'd expect. Toyota, for one, is warning that U.S. labor costs could severely curtail thei
So how exactly can a company with the heritage and scope of Ford Motor Company manage to lose $12.7 billion in one year? Or, for that matter, how could GM lose $10.6 billion last year? All while Toyota continues to soldier on, racking up profits and closing in on number one. Well, it's more involved than most people realize. Sure we can gripe about product and quality all day long, but as CNN tells us, there's a lot more to it than that. Using a report by the Detroit consulting firm of Harbour-F
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