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Can someone make me a pie...chart for the cost of a Chevy?

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lelgt60 Donating Member (417 posts) Send PM | Profile | Ignore Fri Dec-12-08 10:46 AM
Original message
Can someone make me a pie...chart for the cost of a Chevy?
I'm really confused with all the numbers being floated by various groups with various agenda that compare how much big 3 auto workers make vs U.S. based Toyota/Honda/VW/BMW workers. I suspect I'm not the only one. When the numbers aren't clear, it's a setup for the demagogues. I wonder if, with our "homogeneous" progressive group at DU, we can come up with some sort of consensus upon which further rational arguments can be based? Or point me to another article or website?

So, I would like to know:

1) Material/purchased parts costs. Are there any substantial differences between the big 3 and the foreign? If so, why?

2) Average hourly labor cost, both today, and what's been already agreed upon for the next couple of years) including medical/vacation+holiday/pension. Would be nice if salary/medical/vacation+holiday/pension were split out separately. Cost of pensions for current workers vs former workers would be nice to know as well.

3) Average number of labor hours to build the cars. I haven't seen this mentioned. If the US is at a disadvantage here, it could be due to old equipment, poor design, or restrictive union work rules. Some analysis would be nice.

4) Average cost of "overhead" per car. This would be costs for non-hourly workers like manufacturing engineers, designers, IT, HR, executives, etc.

5) Cost of servicing corporate debt. e.g. interest.

6) Finally, it would also be nice to know these numbers for something like the Chevy Malibu/Toyota Camry compared to some big SUV

Anything else that I forgot.

Hopefully some of you instantly know these numbers, or, at least, where we can find them.

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Venceremos Donating Member (488 posts) Send PM | Profile | Ignore Fri Dec-12-08 10:50 AM
Response to Original message
1. k&r
Don't have the answers, but am interested to know, too.
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Fla Dem Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-12-08 10:53 AM
Response to Original message
2. Don't know if this helps, but pie chart shows 8.4% is labor.
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old mark Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-12-08 11:16 AM
Response to Reply #2
4. So, assuming the car sells for $15,000, the 8.4% labor cost is
$1260. I don't see that this is overwhelming. This is just anti labor bullshit, saying the high labor cost is a reason for low auto sales.

The reason is that many people are no longer employed, and many others are fearful of losing their jobs, and will not get into debt buying a new car anytime soon. Why is this hard to understand?

mark
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lligrd Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-12-08 11:04 AM
Response to Original message
3. I'd Like To Know How Much Is Management Cost
especially CEO cost (including bonuses and perks like private jets).
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ContinentalOp Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-12-08 11:23 AM
Response to Reply #3
5. I tried to calculate that a while back but it was actually pretty small.
I added up the all of the numbers I could find for GM executives and then divided it by the total number of cars they sold in a year and it was a pretty small amount. They make absurd sums of money, but there are so few of them that it doesn't amount to much per car.
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lelgt60 Donating Member (417 posts) Send PM | Profile | Ignore Fri Dec-12-08 11:35 AM
Response to Reply #3
9. We need to be clear what "Management Cost" means
If we are talking the total compensation (which is the only thing that really matters) of some set of high up executives, it probably is a small portion of the total cost of the car. However, that doesn't mean we shouldn't puts caps on it. There are other things like fairness that come into play, as well as the productivity reducing effects of unfairness.

I'm more interested in overhead costs - the costs of non-direct labor, advertising, etc. Traditionally these have been assumed to be small, but over the last 20 years, research has shown this is not true in many industries. I don't know about the auto industry. They sure seem to place lots of ads.
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sinkingfeeling Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-12-08 11:24 AM
Response to Original message
6. Haven't found the information you're looking for, but did find this story.
http://www.reuters.com/article/pressRelease/idUS150987+...

Lean Improvements, Worker Buyouts Bring Detroit Three Productivity Closer to Asian...
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ipfilter Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-12-08 11:25 AM
Response to Original message
7. It really shouldn't matter how the sausage is made.
The price of a vehicle is determined by what the market will bear. When I bought my house I knew I was paying substantially more than what the raw materials and labor cost to build it. Nobody seems to worry what a 42" plasma TV costs to build. Why are vehicles any different?
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lelgt60 Donating Member (417 posts) Send PM | Profile | Ignore Fri Dec-12-08 11:30 AM
Response to Reply #7
8. True - but it matters if we can't sell the sausage profitably
If the market won't pay the price we need to stay in business (which is the claim I hear), they we need to figure out the fastest/best/easiest way to reduce cost so we can sell for less and stay in business.

What we're hearing now is we have to reduce the cost of direct labor. I, and many people here, question that claim.

However, to discuss it rationally, we need to know all the costs involved.
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ipfilter Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-12-08 11:39 AM
Response to Reply #8
10. This is the premiss behind the bridge loan.
Currently, the automakers can't sell their wares because nobody is buying. Due to legacy labor costs F, GM, and Chrysler are hamstrung in this market compared to the transplants. Nobody is profitable right now but the Big 3 are running out of cash to survive the current economic situation.

I'm very conflicted on the whole thing. Part of me believes CH 11 bankruptcy helps take care of failed business models but the economic and social impact of this are huge. Unfortunately, the Republicans are taking this opportunity to bust up big labor on their way out of power and that upsets me deeply.
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lelgt60 Donating Member (417 posts) Send PM | Profile | Ignore Fri Dec-12-08 12:02 PM
Response to Reply #10
11. Are you sure it's due to legacy labor costs?
That's what I'm trying to figure out. It's the "accepted" answer, but is it the real answer?
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ipfilter Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-12-08 01:14 PM
Response to Reply #11
12. I'm not positive,
I read a very good article on this subject a few months ago but I can't recall where it was. It told the history of Bethlehem Steel and how its legacy labor costs brought it down over time. The article showed how the current auto industry is in the same position and the transplants will be there in a couple of decades. It was interesting but I can't find it. I'm looking...
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JVS Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-12-08 01:18 PM
Response to Reply #8
13. The fact that US cars are cheaper than their equivalent Japanese counterparts...
Edited on Fri Dec-12-08 01:19 PM by JVS
is an indicator that the problem is on the demand side and not the supply side. If they could command a similar price, then the big 3 would be much better off, but still stuck in depressed market. So cutting costs really doesn't address the problem
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lelgt60 Donating Member (417 posts) Send PM | Profile | Ignore Fri Dec-12-08 02:26 PM
Response to Reply #13
14. Yes - the demand side differential is due to executive decisions
It's got to be obvious to any outsider, especially any free market capitalist, that the executives should go. They screwed it up.

However, there is currently a loud call for the auto workers to "fix" the problem created by the executives based on the cost differential argument. I just want to understand that side better.
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