Hyundais cost/car versus The Big 3 American Car Manufacturers

Interesting article in "Michigan Today" from the University of Michigan.
According to Walter McManus, Director of the Uof M Transportation
Research Institute, Automotive Analysis Division.

The following excerpts are eye opening;
Ford, GM and Chrysler spend $2903 per car on labor alone, Hyundai spends
$551. Hyundais retirement expenses are $24 per vehicle, while the big
3's cost $411 per vehicle. Big 3 health care cost is $1280 per vehicle,
Hyundai's is $27 per vehicle. Likewise Japanese health care and pension
costs are a fraction of what their American competitors pay.

 

Yes, and the Japanese and Koreans who manufacture in the US will
eventually begin to have some of these problems also. They simply don't
have the large "tail" of retirees that the longer standing US companies
have here in the US. However, I'm not sure that the US automakers will
survive long enough for this to affect their competitors and return the
playing a little towards level. However, you will see the cost of
Hyundai's climb as their costs increase as well.


Matt

 

The same thing killed the steel industry in this country, High union wages
and benefits. I think most of the Korean cars produced in the U.S will
probably be in the traditionally non-union south.

 

That's what they'd like you to think, and they've done a good job
getting a lot of people to believe it.

The major factor that has hurt American manufacturing is not unions,
pensions, labor cost or healthcare. In reality it is our government's
unwillingness to insist on a level playing field with our trading
partners. We allow free trade even though our partners choose to not
abide by similar environmental regulations, overtime, labor rules,
social security, safety regulations, and so on.

We can de-unionize every job in America and we still cannot compete
with Asia because they don't abide by the same rules as we do. If the
government were to have some backbone and say, no more free trade until
you treat the environment and your workers better, only then could we
hope to compete with them.

 

So you want the U.S. Government to TELL other industries in other countries
how much to pa their workers? What kind of benefits to give their workers?
Like it our not the U.S. high standard of living created high wages, now
other Countries have the capability to compete without the expense. In time
as their standard of living increases so will the cost of business.

 

The only problem with your theory is the rust belt Northeast part of this
country became the rustbelt before the free trade agreements. Companies like
Mack Truck left Pennsylvania to move down south, not out of the country. The
problem remains today, The south has always had lower non-union wages. Do
the foreign auto makers that produce cars in this country have UAW workers?
Then we have things like the Overseas Private Investment Corporation (OPIC)
that guarantee companies that move out of the US to banana republics that
they will not lose money if nationalized by these governments. We are
literally guaranteeing the success of companies that leave here and put
Americans out of work.
I don't know what the solution is, I don't think de-unionizing all jobs is
the answer nor is protectionism.
Unions were in large part responsible for creation of the middle class in
this country, but the management decided they would rather rob the union
members than protect them. And if we protect our industries from foreign
competition we end up with products that nobody wants, Remember the junk
Detroit produced in the 70's and 80's? Toyota was a wake up call.
Jack Cassidy

 

It's already happening. I've read two articles in the last couple of
months about China outsourcing to other countries such as Vietnam as
their labor costs are getting too high.

What goes around, comes around.

Matt

 

It is the same in all industries! The IT field is seeing jobs
outsourced to Bangalore in India outsourced to places like China.
Infact giants like Infosys already have their own centers in China

 

If you want to pick Unions to go after it's the public employee
unions. They get their raises, paid benefits and more holidays than I
can name but the manufacturing sector get's the bill. NY is the
leader in this but seveal other states are not far behind.
manufactuing wages have been on a steady decline as jobs left but
government wages (direct and indirect) have been growing at more than
the inflation rate. The result has been taxes growng at more than the
inflation rate and the greying of the state as the early to mid career
workers leave.

 

Bingo!

Unfortunately, NY can't close up shop and move down South. Even if they
could, nobody would want them.

All kidding aside, if the unions keep growing, we are heading more and more
toward a French-like society. <shudder!>

 

<snipped>

I can see you've never been to Spring Hill, Florida. <g>
Just about everyone there is either from New York or Michigan, Especially
during the winter months.
Hell, at least they're not Canadians

Jack Cassidy

 

that will taper off also. As the economy continues to collapse fewer
folks will be retiring from NY so they won't be going places to
"winter".

 

Greed is a big factor too. Often CEOs come in to "fix" companies, but in
reality just make them profitible for the short term. In the '70s US Steel
turned a healthy profit for one quarter by selling their next-generation
steel making technology to Japanese firms.... not long thereafter, Japanese
steel went from a crappy cheap alternative (used in cars like the Pintos of
the early '70s) to cheaper AND better quality than US steel.

Basically we seem to be willing to sacrifice long-term sustainable growth
for quick "get rich" returns. As a result, we are bankrupting our nation's
future. Well, most of those bastards will be dead by the time the US
collapses into a 3rd world country, so what do they care?