The Big 3 Auto ‘Bailout’

 $73 per hour? Not exactly-
Globe and Mail Jeremy Cato, December 19, 2008 at 4:51 PM EST

The auto bailout loans announced by the White House this morning, and those expected to be unveiled tomorrow by Ottawa, call for among other things wage and work rule concessions that will make unionized auto workers "competitive" with foreign auto makers by the end of next year.

Which foreign auto workers?

The non-union Honda workers at the Greensburg, Indiana plant that earn $14.84 per hour (all figures in U.S. dollars)? Or the Toyota workers in Georgetown, Kentucky earning $27-$30 per hour? Or the Kia workers now being hired in rural west Georgia for $14.90 an hour? Or the Toyota workers in the Prius factory set to open in Blue Springs, Mississippi? They are expected to earn about $20 an hour in 2010?

…

But what that number actually reflects is the wage cost of unionized workers. Felix Simon explains what is going here in a posting on portfolio.com. The average GM assembly-line worker makes about $28 per hour in wages, and I can assure you that GM is not paying $42 an hour in health insurance and pension plan contributions. Rather, the $70 per hour figure (or $73 an hour, or whatever) is a ridiculous number obtained by adding up GM’s total labor, health, and pension costs, and then dividing by the total number of hours worked. In other words, it includes all the healthcare and retirement costs of retired workers.

The actual numbers: GM’s hourly labor costs are calculated by dividing the financial obligations paid to more than 700,000 workers, retired workers and surviving spouses divided by the actual hours worked by about 180,000 GM workers on the job today. That’s where the $70 an hour numbers comes from; that’s how a wage of $28 an hour becomes a labour cost of $70 an hour.

…. More, click here

The full article is well worth reading.