Via Carpe Diem
From Dec. 1 WSJ editorial America's Other Auto Industry:
Consider labor costs. Take-home wages at the U.S. car makers average $28.42 an hour, according to the Center for Automotive Research. That's on par with $26 at Toyota, $24 at Honda and $21 at Hyundai. But include benefits, and the picture changes. Hourly labor costs are $44.20 on average for the non-Detroit producers, in line with most manufacturing jobs, but are $73.21 for Detroit (see chart below).
This $29 cost gap reflects the way Big Three management and unions have conspired to make themselves uncompetitive -- increasingly so as their market share has collapsed (see the chart below). Over the decades the United Auto Workers won pension and health-care benefits far more generous than in almost any other American industry. As a result, for every UAW member working at a U.S. car maker today, three retirees collect benefits; at GM, the ratio is 4.6 to one.
From a slightly different angle:
The chart [below](click to enlarge) is from the 2008 Harbour Report on automotive manufacturing productivity, showing the $606 per vehicle labor cost advantage for Toyota vs. the Detroit 3 in 2007, because of the average hourly labor rate of $75 for the Detroit 3 compared to the Toyota hourly rate of $47. Looking forward, Harbour predicts a labor rate of $54 per hour by 2011 for the Detroit 3, and only a $97 per vehicle cost disadvantage per vehicle.
GM sales in 2007: 9,370,000 vehicles
Toyota sales in 2007: 9,366,418 vehicles
GM profit/loss in 2007: -$38,730,000,000 (-$4,055 per car)
Toyota profit in 2007: +$17,146,000,000 (+$1,874 per car)
(from: Larry Kudlow and Sen. Tom Coburn on CNBC's "Kudlow & Company")
Lots more worth reading on Carpe Diem.
Humor is not only fun, it works because it carries a bit of truth. In the spirit of truth and humor: click here. (Warning to the sensitive: the language is blunt.)
Update: Another good article from back in Feb. 2006: "Against Toyota, GM Need to Mind the Gap" and a more recent one "Some companies are too pwerful to fail"
Update 12/12/08: Here's another: Bankruptcy Doesn't Equal Death