Covering recently announced layoffs at Ford, the evening newscasts
have ignored the role labor union costs have played in the number
two automakers woes. The January 24 NBC Nightly News report filed
in the In Depth segment on the auto industry came close, but still
skipped over the issue. Reporter Anne Thompson left out the millions
of dollars domestic auto companies lose annually paying laid-off
workers.
Patriotism has been replaced by pragmatism. Americans
bought 6.8 million foreign vehicles last year, NBCs chief
financial correspondent lamented before presenting Csaba Cbeba of
Car and Driver magazine who argued that Ford (NYSE:
F) and
General Motors (NYSE:
GM)
have to be better than the foreign competition to really get the
sort of attention that's going to supercharge those sales.
Beyond the need for Detroit to produce better cars,
Thompson added that some believe no matter how many plants and jobs
Detroit cuts, what the Big Three really need is a new deal with the
United Autoworkers Union that reduces retirement and health-care
costs.
But rather than delving further into the issue as the In Depth tag
for her segment would suggest, Thompson avoided mentioning the hefty
price tag Fords jobs bank program generates. Instead she chalked up
foreign advantage to non-union plants with younger, cheaper
workers.
But on Jan. 23, the
Detroit Free Press reported that Ford is already paying more
than 1,000 former employees in its jobs bank, running up a tab of
$140 million a year.
Ford is hardly the only company saddled with heavy
costs from jobs banks, which were established by Detroit automakers
as a concession to the United Auto Workers (UAW) union in the
mid-1980s. In the
Oct. 17, 2005,
Detroit News, reporter Bryce Hoffman noted that General Motors
had 5,000 such workers while auto parts maker Delphi was losing $400
million-per-year on its 4,000 former workers in its jobs bank.
Other media outlets have recorded the heavy cost of
labor unions on Detroits profitability. On Dec. 19, National Public
Radios
Diane Geng compared among other things average hourly pay,
health care, and labor costs between Toyota (NYSE:
TM)
and General Motors, the number two and number one car companies in
worldwide sales volume, respectively.
Geng found that while paid less on average, non-skilled
assembly line workers at Toyota still earn on average $27-an-hour,
or more than $56,000 yearly, well above the
median wages for Kentucky, California, Alabama, West Virginia,
and Indiana, where
most Toyota cars and engines sold in the United States are
produced. Of those states, only Alabama is a right-to-work state.
Toyota spends an average additional $21 an hour in
benefits for its employees.
In Depth Report on Detroits Woes Skirts Heavy Union Costs
January 25th, 2006 2:00 PM
Font Size