First of all, these numbers are outdated. The contract between GM and UAW was renegotiated in late ’07 and the gap between workers of GM and Toyota is now considerably smaller.
If you assume that $146,520 figure is correct, you have to subtract payroll taxes, employer-side social security & medicare contributions, 401k matching contributions, etc.
As has been correctly pointed out, an average UAW worker gets 60-70k gross unless he works overtime. On top of that, he’s promised retirement benefits which aren’t nearly as lavish as the ones received by workers who retired in the 90’s (which GM is, unfortunately, forced to provide). Renegotiating existing contracts would do nothing to change the fact that GM is on the hook for huge amounts of money.
[quote]”The focus has to be on the economy as a whole as opposed to a UAW contract,” Gettelfinger told reporters on a conference call, noting the labor costs now make up 8 percent to 10 percent of the cost of a vehicle.[/quote]
Cutting labor costs in half (well below Japanese costs) would increase profit on a Chevy Silverado or a Ford Focus by $700-$900. GM is currently losing $2300 per vehicle.
