Detroit: General Motors Co and Ford Motor Co have much higher labour costs than their crosstown rival Fiat Chrysler, according to a new study released just ahead of a meeting of United Auto Workers officials as they prepare for contract talks with the Detroit Three.
GM’s US autoworkers on average earn about 21 per cent more in wages and benefits than their counterparts at Fiat Chrysler Automobiles, reflecting the much higher percentage of lower-paid, entry-level workers at FCA, according to a study of 2014 labour costs by the Centre for Automotive Research (CAR).
Ford Motor Co’s hourly labour costs were $57 (Dh209), just behind GM’s at $58. FCA’s US workers averaged $48 per hour.
The two-tiered pay scale implemented as part of the United Auto Workers 2007 labour agreement allows GM, Fiat Chrysler and Ford to pay their newer “entry-level” workers less than veteran ones. UAW leaders have said that narrowing the gap between new hires and veterans will be a top issue when negotiations begin with the Detroit automakers this summer.
The UAW leadership heard from the union’s local leaders on Tuesday and Wednesday at a convention hall in Detroit.
Germany’s Daimler AG, for its Mercedes-Benz plant in Alabama, its only US plant, has the highest US auto labour costs, at an average of $65 an hour. Workers at the US plants of Volkswagen AG and BMW earn the least, at $38 and $39 per hour, respectively, according to estimates by CAR.
GM, Ford and Fiat Chrysler are the only automakers in the CAR report whose US workers are represented by the UAW.
Despite major restructuring since the 2009 recession, GM and Ford still have higher labour costs than their major competitors.
The $10 per hour labour cost gap between GM and Toyota Motor Corp translates to roughly $250 a car in additional labour costs for GM, according to data in the report.
Some 43 per cent of Fiat Chrysler’s US autoworkers earn the lower entry-level wage, almost double the percentage of such workers at Ford and GM.
Among other automakers operating in the United States, Honda Motor Co workers earned on average $49 per hour, Toyota Motor Corp $48, Nissan Motor Co $42, Hyundai Motor Co and its corporate stablemate Kia Motors Corp $41.
Per hour labour cost averages include pay for “temporary” workers who are formally employed by outside agencies such as Kelly Services Inc but mainly work full-time alongside workers employed directly by the automakers. Japanese automakers have the highest percentages of temporary workers, which cut labour costs, CAR analysts have said.
