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Jobs vs. labor costs to drive auto talks
By BRENT SNAVELY [The following is an excerpt from the article] As the UAW fights for jobs, and the automakers work to lower labor costs, the two sides could find common ground. That's because the automakers can lower their labor costs by hiring new workers at an entry-level wage rate of $14 and $16 per hour, thereby lowering their average labor cost per worker. Under the current contract GM and Chrysler can hire an unlimited number of entry-level workers until 2015 while Ford's contract is capped at 20 percent. Already, Chrysler has lowered its total labor costs more than Ford and GM because it has filled many of the more than 2,800 jobs it has announced since June 2009 with entry-level workers. That has helped Chrysler cut its total labor costs per worker from nearly $76 per hour in 2006 to $49 per hour in 2010. Retirements needed Marty Mulloy, Ford's vice president of labor affairs, said Ford could reduce its total hourly labor costs by as much as $3 per hour to $55 per hour if it hires the maximum amount of entry-level workers allowed under its current contract. But it cannot do that unless older workers retire, and many are reluctant to do so given Ford's success, which comes with annual bonuses. UAW President Bob King said Friday he plans to push for an increase in the entry-level wage, which is about half of the regular $28 per hour. "Entry-level to me is not a good middle-class standard of living today," King said. "So we want to figure out a way to get more income to those workers." |