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Mon Dec 26, 2011, 07:04 PM

 

How Germany builds more cars than US while paying twice a much to workers!

In 2010, Germany produced more than 5.5 million automobiles; the U.S produced 2.7 million. At the same time, the average auto worker in Germany made $67.14 per hour in salary in benefits; the average one in the U.S. made $33.77 per hour. Yet Germany’s big three car companies—BMW, Daimler (Mercedes-Benz), and Volkswagen—are very profitable.

How can that be? The question is explored in a new article from Remapping Debate, a public policy e-journal. Its author, Kevin C. Brown, writes that “the salient difference is that, in Germany, the automakers operate within an environment that precludes a race to the bottom; in the U.S., they operate within an environment that encourages such a race.”

There are “two overlapping sets of institutions” in Germany that guarantee high wages and good working conditions for autoworkers. The first is IG Metall, the country’s equivalent of the United Automobile Workers. Virtually all Germany’s car workers are members, and though they have the right to strike, 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,” according to Horst Mund, an IG Metall executive. The second institution is the German constitution, which allows for “works councils” in every factory, where management and employees work together on matters like shop floor conditions and work life. Mund says this guarantees cooperation, “where you don’t always wear your management pin or your union pin.”

READ LOTS MORE: http://www.forbes.com/sites/frederickallen/2011/12/21/germany-builds-twice-as-many-cars-as-the-u-s-while-paying-its-auto-workers-twice-as-much/

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Reply How Germany builds more cars than US while paying twice a much to workers! (Original post)
Bennyboy Dec 2011 OP
yourout Dec 2011 #1
dipsydoodle Dec 2011 #2
rfranklin Dec 2011 #3
dipsydoodle Dec 2011 #5
FreakinDJ Dec 2011 #8
Rosa Luxemburg Dec 2011 #12
DissedByBush Dec 2011 #33
Rosa Luxemburg Dec 2011 #37
Boston_Chemist Dec 2011 #17
TBF Dec 2011 #22
dipsydoodle Dec 2011 #23
Sarah Ibarruri Dec 2011 #13
dipsydoodle Dec 2011 #24
rfranklin Dec 2011 #26
dipsydoodle Dec 2011 #28
Doctor_J Dec 2011 #32
msongs Dec 2011 #4
FreakinDJ Dec 2011 #6
lib2DaBone Dec 2011 #7
TreasonousBastard Dec 2011 #9
boppers Dec 2011 #15
Scuba Dec 2011 #35
patrice Dec 2011 #10
Scuba Dec 2011 #36
no_hypocrisy Dec 2011 #11
Lasher Dec 2011 #20
muntrv Dec 2011 #14
boppers Dec 2011 #16
James48 Dec 2011 #18
boppers Dec 2011 #19
Lasher Dec 2011 #21
DFW Dec 2011 #25
Lasher Dec 2011 #29
DFW Dec 2011 #30
Lasher Dec 2011 #31
and-justice-for-all Dec 2011 #39
leveymg Dec 2011 #27
FourScore Dec 2011 #34
dmallind Dec 2011 #38

Response to Bennyboy (Original post)

Mon Dec 26, 2011, 07:06 PM

1. And their workers can actually afford their cars.

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Response to Bennyboy (Original post)

Mon Dec 26, 2011, 07:08 PM

2. You can't easily compare differences in international labour rates

without taking into consideration numerous other factors.

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Response to dipsydoodle (Reply #2)

Mon Dec 26, 2011, 07:12 PM

3. Oh please, the U.S. is the world's biggest economy and should be able to pay accordingly...

 

There is no excuse for not doing so. Unless you can come up with those numerous other magical factors.

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Response to rfranklin (Reply #3)

Mon Dec 26, 2011, 07:31 PM

5. Fine then

pay those rates and see how many cars you can sell in the USA for the prices used in Europe which are c. 40% higher than in the USA. Next up be prepared to pay European prices for homes and European prices for food. etc etc etc.

Beginning to see what I mean now ?

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Response to dipsydoodle (Reply #5)

Mon Dec 26, 2011, 07:37 PM

8. Great - now we have Milton Appologist

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Response to dipsydoodle (Reply #5)

Mon Dec 26, 2011, 09:08 PM

12. but the Germans are more people-friendly then the USA

and their cars do more miles per gallon (or Km/L)

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Response to Rosa Luxemburg (Reply #12)

Tue Dec 27, 2011, 02:59 PM

33. Liters per 100 kilometers (l/100 km)

 

That's how they measure their mileage.

It's a good way to measure it too, correlates more to how much it costs to run a car than mpg.

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Response to DissedByBush (Reply #33)

Wed Dec 28, 2011, 02:04 PM

37. Thanks for the info

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Response to dipsydoodle (Reply #5)

Tue Dec 27, 2011, 01:03 AM

17. It's actually the unique cultural traits of Germany that allow this

 

The USA has never been a worker friendly country. IN fact, you might say that the USA's labor history has been uniquely brutal towards workers. The gains that allowed so many in the Blue collar labor force to make it into the middle class are in the process of disappearing, and the middle class is disappearing.

Our nation has taken a turn for the brutal, and there is no scarcity of sophists that are ever ready to silence any criticism of the system. Milton Friedmann was the top sophist of them all.

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Response to dipsydoodle (Reply #5)

Tue Dec 27, 2011, 07:47 AM

22. Yes we see exactly what you mean -

and your use of the Che avatar is insulting.

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Response to TBF (Reply #22)

Tue Dec 27, 2011, 08:03 AM

23. Feel free to feel insulted.

The only mistake Cuba made was not listening to Ernesto : he wanted them to go with China not Russia.

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Response to rfranklin (Reply #3)

Mon Dec 26, 2011, 09:16 PM

13. I agree. nt

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Response to rfranklin (Reply #3)

Tue Dec 27, 2011, 08:25 AM

24. OK - so lets assume

you both increase labour rates to Germanys level and your total production to their level too.

Who did you have in mind to sell the cars to?

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Response to dipsydoodle (Reply #24)

Tue Dec 27, 2011, 09:32 AM

26. If we built better cars perhaps more people would buy them...

 

We are after all, the greatest nation with the smartest, most exceptional people.

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Response to rfranklin (Reply #26)

Tue Dec 27, 2011, 09:42 AM

28. Thats not the issue

The issue is that generally speaking the US has built cars to suit its own market. The Germans build cars to suit world markets.

Having said that I may be a fine one to talk - I drive a Wrangler Sahara Unlimited. However - Ive got the diesel one which you cannot get over your side.

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Response to dipsydoodle (Reply #24)

Tue Dec 27, 2011, 11:38 AM

32. We could sell them to the suddenly middle class autoworkers

and their children and parents. Auto workers and their families could afford a new car every 2-3 years instead of driving the same one for 12 years.

Middle class expansion = economic growth, Milton

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Response to Bennyboy (Original post)

Mon Dec 26, 2011, 07:28 PM

4. they pay cheap here because THEY CAN GET AWAY WITH IT nt

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Response to Bennyboy (Original post)

Mon Dec 26, 2011, 07:36 PM

6. "Fordism" works - Milton's Trickle Down BS has destroyed the World's Economy

Just ask Greece how well Milton's crap has worked out for them

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Response to Bennyboy (Original post)

Mon Dec 26, 2011, 07:36 PM

7. There is no need to have a "Low Wage, Race-to-the bottom" economy.

 

We could have a high wage.. High Tech economy. It's a choice.. and leadership vision.

Our politicians who are bought and sold by Corporations are the ones who want us to be trapped into a low wage, low tech society that uses prison labor, child labor and tax cheating to produce mega profits for the benefit of off-shore corporations.

Our Congress and Senate are Ball-less, gutless and corrupt.. as they sanction this rape of American Workers.

When will it stop? Not soon.. as witnessed by the violence against OWS.

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Response to Bennyboy (Original post)

Mon Dec 26, 2011, 07:48 PM

9. While I won't argue with the central premise that...

our system sucks for the workers while theirs is pretty good, it has to be noted that BMW, Mercedes and Porsche don't sell cheap cars. Volkswagen makes a lot of its cheap cars in eastern Europe and has Audi to make the big bucks st home.

So, they can pay twice as much when the product sells for much more than twice as much.

Having said that, it is true that historically our labor relations have been far too adversarial. Japan and Germany are both culturally oriented toward cooperation and get a huge advantage from that. We are more like the British, where every little thing is a major battle-- and look where their auto business went.

If fault must be assigned I suppose it's with the bosses, since they called the shots and refused to talk until forced. But, we are far past the point where assigning blame accomplishes anything-- what to do about it is the big question.

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Response to TreasonousBastard (Reply #9)

Tue Dec 27, 2011, 12:08 AM

15. If you don't make cheap crap, workers are paid better...

So, does UAW have the leverage to fight for actually making better products? If they have that leverage, are they using it?

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Response to TreasonousBastard (Reply #9)

Tue Dec 27, 2011, 06:07 PM

35. Not enough data. While purchase price is high, total cost of ownership factors in ...

gas mileage

lifespan

financing

maintenance

etc.



Without these elements, one cannot say their cars are more expensive than others.

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Response to Bennyboy (Original post)

Mon Dec 26, 2011, 07:51 PM

10. K&R for "The second institution is the German constitution, which allows for “works councils” in...

(and) "The second institution is the German constitution, which allows for “works councils” in every factory, where management and employees work together on matters like shop floor conditions and work life. Mund says this guarantees cooperation, “where you don’t always wear your management pin or your union pin.”

The German solution to what in the U.S. amounts to charges of union-corruption, workers sold out after the fact and BEFORE "the deal" gets to rank-and-file members' table.

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Response to patrice (Reply #10)

Tue Dec 27, 2011, 06:08 PM

36. Bingo.

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Response to Bennyboy (Original post)

Mon Dec 26, 2011, 08:21 PM

11. Germany MUST have different laws and regulations concerning shareholders and corporations.

Seems to me that in this country the shareholders' interests always outweigh the workers'.

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Response to no_hypocrisy (Reply #11)

Tue Dec 27, 2011, 02:28 AM

20. Shareholder and worker interests are subservient to those of senior management.

That is a huge problem among publicly traded corporations in the US.

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Response to Bennyboy (Original post)

Mon Dec 26, 2011, 11:51 PM

14. I wonder if CEO pay is Germany is

not as ridiculously high as the US?

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Response to boppers (Reply #16)

Tue Dec 27, 2011, 01:03 AM

18. Factcheck says no.

While it is true that CEO pay is obscene, Politi-FACT-CHECK rates that particular chart, with it's allegation of 475:1, as false.

Source:
http://www.politifact.com/truth-o-meter/statements/2011/oct/10/facebook-posts/viral-facebook-post-ceo-worker-pay-ratio-has-obscu/

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Response to James48 (Reply #18)

Tue Dec 27, 2011, 02:30 AM

21. While that particular article might be true, I have lost confidence in PolitiFact.

Have you seen what they have selected as the number one lie of the year?

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Response to Bennyboy (Original post)

Tue Dec 27, 2011, 09:12 AM

25. As one who lives and works in Germany most of the time

There are several factors to consider. First off, most workers at Daimler-Benz or BMW cannot afford
the products they make. Company cars make up a LOT of German domestic consumption due to tax
laws that favor them. Daimler and BMW have factories elsewhere (e.g. Alabama and South Carolina)
to offset domestic costs. If exports were to drop off, especially to countries with a lot of corruption
and new oligarchies (Russia, China), ALL German car manufacturers would be in trouble. Germany's
domestic market could never absorb their production.

The councils between workers and management are the big key. Strikes hurt both--in an export
driven economy a very serious deal. Strikes in a sector like that hurt Germany's economy very
badly, and lead to losses and hiring freezes.

Take into account, too, the exchange rate--the euro is still over $1.30, which skews things.
Also--Germans pay higher income taxes than we do, and have a 19% sales tax on everything,
which takes a bite out of every income, but hits lower-income people hardest. At $67 per hour
with their 37 hour work week, that's $129,000 a year. That puts you close to the 49% income
tax bracket in Germany, when you include all surcharges, and your employer had better sell one
HELL of a lot of cars if he is to continue to afford that.

One of the weirdest things in Germany--and probably the single reason that wind energy doesn't already
account for more energy production: in Germany sitting members of the Parliament are allowed to serve
on the boards of directors of corporations (!!!!!!!!!!!). Imagine a bunch of Republican Senators and
Congressmen sitting on the board of directors of Exxon-Mobile (not that half of them aren't in their
pockets already).

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Response to DFW (Reply #25)

Tue Dec 27, 2011, 10:10 AM

29. Universal health care is part of the equation.

It justifies those higher taxes you mentioned.

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Response to Lasher (Reply #29)

Tue Dec 27, 2011, 11:05 AM

30. Just for the record, Germany does NOT have universal health care. Where in Germany do you live?

Not the part of Germany I live in, that's for sure.

France and England do have a kind of universal health care, Germany does not. It has an odd
patchwork network of different kinds of agencies, companies and organizations that are designed
to make sure everyone has some kind of health insurance, but even in Germany there are people
without health insurance. You have to be some kind of lazy idiot to be uninsured in Germany, but
there are some who fall through the cracks, and there is still the two-tier level of care--first class
with little to no waiting if you are "privately insured," which means you pay out of your pocket up
front and submit the bill to your insurance carrier after for reimbursement, or second class
(Kassenpatienten), which means the doctor, clinic or pharmacy submits the bill to a big insurer, and
gets paid later--often much later, which is a burden to physicians, hospitals and pharmacies who have
to pay their employees on time regardless.

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Response to DFW (Reply #30)

Tue Dec 27, 2011, 11:30 AM

31. Wikipedia says Germany has a universal health care system.

http://en.wikipedia.org/wiki/Universal_health_care#Germany

On closer reading it looks like individual mandate to me - which in my opinion is not universal health care. Traditional Medicare for all is what I think of as universal health care.

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Response to Bennyboy (Original post)

Tue Dec 27, 2011, 09:41 AM

27. German companies make cars - US corporations make profits for shareholders. That's the difference.

Germany's economy is oriented toward production of goods, while the US economy is dominated by financial interests.

Yet, it turns out that the US version also makes inferior profits as well as products.

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Response to Bennyboy (Original post)

Tue Dec 27, 2011, 06:06 PM

34. K&R

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Response to Bennyboy (Original post)

Wed Dec 28, 2011, 05:42 PM

38. Couple issues here.

The totals exclude light trucks (including SUVs and crossovers on truck platforms) - a huge segment of the US market and a negligible one of the German. The US produces more passenger vehicles than Germany.

Secondly the number of temp workers in German car factories is hugely in excess of the ratio in the US, where our unions keep them out. They are not paid near as much as employees.

Thirdly anyone who has seen union contracts in both countries will attest that they are very different animals - far less restrictive limits on hours, production rates and so on. That management/union collaboration thing is real - but it works both ways.

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