Labor Cost

The difference in labor costs between the U.S. automakers and the U.S.-based Japanese transplants is another stark indicator of the competitive disadvantage facing American manufacturers. The picture of this disparity is painted clearly by the numbers.

In 2006, Chrysler labor costs for UAW-represented workers averaged $75.86 per hour. For General Motors, the average hourly rate was $73.26 and $70.51 for Ford.

But according to Chrysler estimates, hourly workers averaged $46 per hour among the Japanese transplant operations.

Such a wide disparity in labor costs creates an environment that makes it difficult for U.S. automakers to price their products competitively compared with the transplants. It’s just another millstone dragging down sales and profits.


Overall Industry Environment
Download