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According to this MIT analysis, manufacturing labor cost = 6.5% of new car cost. Corp overhead 7%.

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Hannah Bell Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Dec-24-08 05:16 PM
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According to this MIT analysis, manufacturing labor cost = 6.5% of new car cost. Corp overhead 7%.
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  - Things that make you go 'hmmmmmmmm...'  ih8thegop   Dec-24-08 05:36 PM   #1 
  - Well, now it will be just 3.25% after they cut the UAW salaries.  jgraz   Dec-24-08 05:37 PM   #2 
  - Excellent find, Hannah!  ColbertWatcher   Dec-24-08 05:38 PM   #3 
  - That includes retirement and health.  Gregorian   Dec-24-08 05:51 PM   #4 
  - Employee health and retirement benefits are "Corporate Overhead" in this study.  MercutioATC   Dec-24-08 05:57 PM   #7 
     - nope, labor cost for production isn't accounted as overhead.  Hannah Bell   Dec-24-08 08:55 PM   #8 
        - It is in THIS report.  MercutioATC   Dec-24-08 10:01 PM   #10 
           - production labor cost = cost of bennies, including retirement.  Hannah Bell   Dec-24-08 10:46 PM   #12 
              - Normally, I'd agree with you...but that doesn't seem to be the way this report did it.  MercutioATC   Dec-25-08 07:54 AM   #13 
  - The report leaves out some data.  sailor65   Dec-24-08 05:53 PM   #5 
  - sure, if it's not production assembly, it's bought as "material," not as labor cost.  Hannah Bell   Dec-24-08 08:58 PM   #9 
  - out of the 7% a huge amount is executive pay  samsingh   Dec-24-08 05:54 PM   #6 
  - How much?  dems_rightnow   Dec-24-08 10:12 PM   #11 
  - connecting to msl1.mit.edu...  SimpleTrend   Dec-25-08 03:08 PM   #14 
 
UrbScotty Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Dec-24-08 05:36 PM
Response to Original message
1. Things that make you go 'hmmmmmmmm...'
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jgraz Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Dec-24-08 05:37 PM
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2. Well, now it will be just 3.25% after they cut the UAW salaries.
:banghead:
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ColbertWatcher Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Dec-24-08 05:38 PM
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3. Excellent find, Hannah!
I tried to say that a while ago and got the numbers wrong!

Good to see MIT publish this!

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Gregorian Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Dec-24-08 05:51 PM
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4. That includes retirement and health.
But if it's all non-worker related, then that's a big deal. Otherwise, it looks like they've combined worker benefits with other things.
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MercutioATC Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Dec-24-08 05:57 PM
Response to Reply #4
7. Employee health and retirement benefits are "Corporate Overhead" in this study.
They're not included in vehicle manufacturing costs or production overhead costs.
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Hannah Bell Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Dec-24-08 08:55 PM
Response to Reply #7
8. nope, labor cost for production isn't accounted as overhead.
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MercutioATC Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Dec-24-08 10:01 PM
Response to Reply #8
10. It is in THIS report.
ONE column addresses "Retirement and Health"...and it's "Corporate Overhead".

If you disagree, please show me where "labor cost" is included in either "Vehicle Manufacturing" or "Production Overhead".
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Hannah Bell Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Dec-24-08 10:46 PM
Response to Reply #10
12. production labor cost = cost of bennies, including retirement.
Edited on Wed Dec-24-08 10:56 PM by Hannah Bell
o/h = exec salaries & bennies.

it's not only workers that have retirees, you know.

"http://books.google.com/books?id=IUZRST_KMvUC&pg=PA17&l... "

"two examples of overhead are utilities & executive salaries..."


compensation = cost of wages/salaries & also benefits.

labor's is accounted in labor cost, upper management's in o/h.
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MercutioATC Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-25-08 07:54 AM
Response to Reply #12
13. Normally, I'd agree with you...but that doesn't seem to be the way this report did it.
Unfortunately, they didn't address the issue in the report itself.
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sailor65 Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Dec-24-08 05:53 PM
Response to Original message
5. The report leaves out some data.
Although labor contribution on external subassemblies is mentioned, it is not quantified. The 42.5% material cost absorbs subassembly labor.
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