• If you are having problems logging in please use the Contact Us in the lower right hand corner of the forum page for assistance.

GMs heavy burden

Cal

Well-known member
http://www.slate.com/id/2171844/#hybridtacky

Will GM Blow It?
The Detroit giant may actually have an edge in hybrid technology. But ...
By Mickey Kaus
Updated Saturday, Aug. 11, 2007, at 7:12 PM ET
In case you missed it, GM's coming next-generation hybrid technology may have some advantages over the hybrid battery Toyota is planning. Autoblog summarizes the WSJ's account:

Toyota's lithium battery of choice uses cobalt oxide, much like the problematic batteries that were catching fire in Sony laptops. GM's iron phosphate-based battery is said to be more chemically stable. ...

Why do I completely lack confidence that GM will capitalize successfully on any technological lead it has? Because where GM has had a technological edge in the past it has been unable to translate it into cars customers like me would rather buy than Toyotas.

A large part of that inability has to do with GM's dramatically higher labor costs--apparently the total labor cost for a GM hourly worker ( including health, pensions etc.) is about $146,000 per year. They're competing against Toyota and Honda who pay $96,000 per year--on equally American workers in American factories. Much of this disparity is in health care costs, something that would be fixed if the government took over that burden. But, according to CNN (citing Harbour-Felex data) $630 per vehicle is for union-negotiated "issues like work rules, line relief and holiday pay," while "paying UAW members for not working when plants are shut costs another $350 per vehicle."

That's about $1,000 per vehicle not related to health care (or "legacy" pensions, for that matter). I don't begrudge Detroit auto workers six-digit pay packages--unlike some professors, I don't think it odd that they make more than professors. It's harder work! But I also don't see why they should necessarily make more than Toyota's hard-working American autoworkers. And as a car consumer, every time I see a nice Detroit vehicle I might want to buy--the Ford Mustang and Pontiac Solstice come to mind--and then I see the tacky materials used in the interior, I think about how much more appealing the car would be if I didn't have to pay $1,000/vehicle in extra costs to finance the UAW's work rules, etc. (with the grand going to buy higher quality plastics or to lower the price). Toyotas don't have this problem--I'm more confident the money I spend will efficiently go into the car I buy. ... 3:12 P.M. link
 
Top