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Foreign automakers pay from $38 to $65 per hour to non-union workers

As leaders for the United Auto Workers gather in Detroit for their Special Convention on Collective Bargaining to work out the negotiating stance for this year's new labor agreements with the Detroit 3 automakers, what they most want to do is figure out how to eliminate the two-tier wage scale. However, the lower Tier 2 wage has allowed the domestic automakers to reduce their labor costs, hire more workers, and compete better with their import competition. As it stands, per-hour labor rates including benefits are $58 at General Motors, $57 at Ford, and $48 at Fiat-Chrysler – a reflection of FCA's much greater number of Tier 2 workers. The Center for Automotive Research released a study of labor rates (including benefits) that put numbers to what the imports pay: Mercedes-Benz pays the most, at an average of $65 per hour, Volkswagen pays the least, at $38 per hour, and BMW is just a hair above that at $39 per hour. Among the Detroit competitors, Honda workers earn an average of $49 per hour, at Toyota it's $48 per hour, Nissan is $42 per hour, and Hyundai-Kia pays $41 per hour. The lower import wages are aided by their greater use of temporary workers compared to the domestics. Automotive News says the ten-dollar gap between those foreign camakers and the domestics turns out to about an extra $250 per car in labor, which adds up quickly when you're pumping out many millions of cars. That $250-per-car number is one that, come negotiating time, the Detroit 3 will want to reduce, as the UAW is trying to raise both Tier 1 and Tier 2 wages. Another wrinkle is that the domestic carmakers are considering the wide adoption of a third wage level lower than Tier 2. Some workers who do minor tasks like assembling parts trays kits and battery packs already make less than Tier 2, but the UAW will be quite wary about cementing yet another wage scale at the bottom of the system while it's trying to fight a bigger battle at the top. News Source: Automotive News - sub. req., BloombergImage Credit: AP Photo/Erik Schelzig Earnings/Financials UAW/Unions BMW Chevrolet Fiat Ford GM Honda Hyundai Kia Mercedes-Benz Nissan Toyota Volkswagen labor wages collective bargaining labor costs

GM CEO Mary Barra predicts mass electrification will take decades

General Motors is allocating a substantial amount of money to the development of electric technology, but Mary Barra, the firm's CEO, conceded that battery-powered cars won't fully replace their gasoline-burning counterparts for several decades. She stressed the shift is ongoing, but she hinted it will be slower than many assume. "We believe the transition will happen over time," affirmed Barra on "Leadership Live with David Rubenstein," a talk show aired by Bloomberg Television. She added that not every car will be electric in 2040. "It will happen in a little bit longer period, but it will happen," she told the host. She was presumably talking about the United States market; the situation is markedly different in Europe and in China, where strict government regulations (and even stricter ones on the horizon) are accelerating the shift towards electric cars. On the surface, it doesn't look like General Motors has much invested in electrification; the only battery-powered model it sells in America in 2020 is the Chevrolet Bolt (pictured), which undeniably remains a niche vehicle. Sales totaled 16,418 units in 2019, meaning the Corvette beat it by about 1,500 sales. In comparison, Cadillac sold 35,424 examples of the aging last-generation Escalade during the same time period. And yet, the company isn't giving up. It has numerous electric models in the pipeline including a slightly larger version of the aforementioned Bolt, the much-hyped GMC Hummer pickup, and an electric crossover assigned to the Cadillac brand. These models (and others) will use the Ultium battery technology that General Motors is currently developing. Its engineers are also working on a modular platform capable of underpinning a wide variety of cars. Bringing these innovations to the market is a Herculean task. EVs may not take over for decades, but Barra and her team must believe their 2% market share will increase significantly in the coming years if they're approving these programs. Autonomous technology is even costlier, more complicated, and more time-consuming to develop. Barra nonetheless expects to see the first General Motors-built driverless vehicles on the road by 2025. "I definitely think it will happen within the next five years. Our Cruise team is continuing to develop technology so it's safer than a human driver. I think you'll see it clearly within five years," she said on the same talk show. Her statement is vague but realistic.

GM's redesigned full-size 2021 SUVs face delay over coronavirus

As General Motors works to conserve cash for the coronavirus pandemic, the automaker reportedly told suppliers that it is postponing development of several future vehicles. The situation may cause GM to delay the launch of the 2021 Cadillac Escalade, GMC Yukon, Chevrolet Tahoe and Chevrolet Suburban SUVs, which had been planned to roll out in April. The original launch plan for the redesigned full-size SUVs, which are some of the most profitable vehicles produced by GM, had called for production of the current models to end at its plant in Arlington, Texas, this week. After a retooling process, the redesigned SUVs were slated to begin production late in the month of April. In an email to suppliers viewed by Reuters and confirmed as authentic by GM, the automaker also said it was suspending development work on six future vehicle programs, including updates of the Chevrolet Equinox, GMC Terrain, Cadillac XT4, Bolt EV, Chevrolet Silverado and GMC Sierra. GM said preproduction work on those programs would be pushed back to calendar year 2021, with most of the updated vehicles scheduled to be launched as 2022 models. According to the Detroit News, work has also been paused on the Chevy Camaro and a future version of the Corvette that has yet to be unveiled and wasn't planned for production during the 2020 calendar year. Last week, the automaker told employees and suppliers it was delaying work on some future vehicles while pushing ahead with near-term models such as its redesigned full-size SUVs and the GMC Hummer EV, Cadillac Lyriq, Chevrolet Bolt EUV and Cruise Origin, as well as its new Ultium battery system. A GM spokesman who spoke with Reuters reiterated on Monday what the automaker had said last week — that the situation with its U.S. plants was "fluid" and that the automaker would "continue to evaluate" whether and when to reopen those plants on a week-by-week basis, with "employee safety" guiding that decision. GM said previously that it was closing most of its U.S. plants indefinitely. In its Monday email, GM asked suppliers to stop work on all pre-production tooling and pre-production parts manufacturing, but also not to dispose of any tooling or materials. GM told Reuters it had solicited volunteers from its workforce to finish the build-out of the current SUVs on a single shift in Arlington.