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German Car Factories Pay Workers Twice as Much as US Factories, Still Profitable
2011 Dec 28, 11:57am 7,348 views 20 comments
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Because building cars involves different types of jobs. Germans keep design, R&D, engineering jobs as well as production of critical parts to themselves, while moving asssembly lines etc jobs to the near third world places like Eastern Europe and poor places in US.
No wonder jobs kept in pay much more.
Makes perfect sense.
HousingWatcher
@
2011 Dec 29, 6:33am
Because building cars involves different types of jobs. Germans keep design, R&D, engineering jobs as well as production of critical parts to themselves, while moving asssembly lines etc jobs to the near third world places like Eastern Europe and poor places in US.
No wonder jobs kept in pay much more.
Makes perfect sense.
That is simply not true. The Germans build a substantial number of their cars in Germany. Volkswagen actually has a super modern factory in Germany complete with a parking garage where the cars park themselves through conveyor belts and automated lifts.
Even GM builds cars in Germany under the Opel division.
Well, given that your typical BMW, Mercedes, Audi, Porsche, Rolls Royce ( Owned by BMW), Bentley, Bugatti and Lamborghini, ( All owned By Volkswagen) cost a lot more ( with the exception of VW) than your typical Ford, GM, Chrysler, Toyota, or Honda product, it would make sense that they can pay their workers more.
HousingWatcher
@
2011 Dec 29, 10:15am
Actually, Honda has 2 factories in Ohio, which is not right to work.
Oh, and all those car factories in right to work states are HEAVILY subsidized by those state govts. So the workers get peanuts in wages and benefits while the companies get welfare.
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So much for the big lie that uniosn and their high pay are bankrupting the US auto industry.
A tale of two systems
In 2010, over 5.5 million cars were produced in Germany, twice the 2.7 million built in the United States. Average compensation (a figure including wages and employer-paid benefits) for autoworkers in Germany was 48.97 Euros per hour ($67.14 US), while compensation for auto work in the United States averaged $33.77 per hour, or about half as much as in Germany, all according to 2007 data from the Bureau of Labor Statistics. For Germany-based auto producers, the U.S. is a low-wage country.
Despite German companies' relatively high labor costs in their home markets, these firms are quite profitable. An examination of the latest publically available financial statements of BMW, Daimler (Mercedes-Benz cars), and Volkswagen reveals strong sales and profits even in the midst of the currently weak consumer markets in Europe and the U.S. In 2010, for example, BMW, produced 1.48 million cars (63 percent of them in Germany), and earned a before-tax profit from its automotive division of 3.88 billion Euros. The Mercedes-Benz car division of Daimler, likewise produced 1.35 million cars (72.4 percent in Germany) in 2010, and earned a before-tax profit of 4.65 billion Euros.
Workers in the German auto industry maintain high wages and good working conditions through two overlapping sets of institutions. First, in the auto industry, virtually all workers are unionized members of IG Metall, the German autoworkers' union. With such union density, workers have considerable power to keep wages high. German autoworkers have the right to strike, but as Horst Mund, head of the International Department of IG Metall explained to Remapping Debate, they “hardly use it, because there is an elaborate system of conflict resolution that regularly is used to come to some sort of compromise that is acceptable to all parties.”
http://www.remappingdebate.org/article/tale-two-systems?page=0,0