U.S. Auto Industry Noncompetitiveness – Higher Labor Costs

17 11 2008

From an Economics Blog titled “Carpe Diem” (http://mjperry.blogspot.com/) comes the following information on wages earned by the Big 3 U.S. auto makers (i.e. Chrysler, General Motors and Ford) versus the “Japanese Transplants” (i.e. Toyota, Honda and Nissan).  Kudos to Dr. Mark J. Perry, a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan.

See the following post in Carpe Diem for the full story (here). Note the $29 per hour pay gap between the U.S. based automakers and those originating in Japan with plants in the U.S..  These types of cost differentials are one of the primary reasons for the non-competitiveness of the U.S. automakers in Detroit. 

 

Daniel Ikenson of the CATO Institute also has a strongly written article on this issue at the Cato@Liberty blog.  See “A Cancer on the Big 3” (here).  Here is a selected quote from his aricle…

“Why is GM (and Ford and Chrysler) seeking taxpayer subsidies when Toyota, Honda, Nissan, Kia, BMW, Daimler, Hyundai and other foreign nameplate producers, who are facing the same contracting demand and credit crunch quietly weathering the storm, are not? Because the latter have costs structures that haven’t been made obsolete and uneconomic by ludicrous union demands.  And, of course, they make cars that Americans want to buy.”

 

Swiss Alps (Eiger Glacier) (travel.webshots.com)

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