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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

Honda finance to pay $24M for discriminatory lending practices

Honda has found itself in hot water in the United States over allegations of discriminatory lending practices. However the Japanese automaker's American subsidiaries are taking actions to not only alter its practices, but compensate the victims of such past discrimination. According to the Consumer Financial Protection Bureau, some Honda dealers were found to have offered less preferential loans to customers of African-American, Hispanic, Asian, and Pacific Islander ethnicities than they have offered to white customers, irrespective of their individual financial situations. The American Honda Finance Corporation has allowed dealers to mark up individual loans by two percent or more, depending on the length of the loan's contract, thereby opening the door for dealers to set interest rates at their discretion. And that discretion, according to the CFPB and the Department of Justice, has been applied in a discriminatory fashion, in violation of the Equal Credit Opportunity Act. Honda, for its part, refutes the allegations and maintains that its practices have not been racially or ethnically discriminatory. The company is nevertheless taking measures to address the charges. For one thing, Honda's US financial arm is reducing the amount of wiggle-room it gives its dealers to only 1.25 percent above the buy rate for short-term loans (5 years or less), and one percent for longer-term loans. It has also set up a $24-million fund to compensate victims of the alleged discrimination, coordinating with the CFPB on the dispersal of said funds. The CFPB reports that "because of Honda's responsible conduct," it is not seeking penalties to be levied against the company for the alleged discrimination. STATEMENT BY AMERICAN HONDA FINANCE CORPORATION RE: Settlement with the Department of Justice and Consumer Financial Protection Bureau Jul 14, 2015 -- American Honda Finance Corporation (AHFC) has reached an agreement with the Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) that shows our commitment to work together to be part of the solution and to establish the path forward that best supports our Honda and Acura customers and dealers with clear and convenient financing options. AHFC strongly opposes any form of discrimination, and we expect our dealers to uphold this principle as well. We firmly believe that our lending practices have been fair and transparent.

Fernando Alonso denies giving McLaren a Honda-or-me ultimatum

MONZA, Italy — Fernando Alonso has denied telling McLaren to choose between him and Honda as the Spaniard considers his future with the Formula One team. The two-time world champion also dismissed media speculation that he retired from last weekend's Belgian Grand Prix without there being anything technically wrong with his car's power unit. Some reports this week suggested that Alonso had run out of patience after three years of unreliable and under-powered engines and had told McLaren he would leave if it stayed with Honda. "Absolutely not true," the Spaniard, who won his titles with Renault more than a decade ago, told reporters at the Italian Grand Prix on Thursday. "I have absolutely not decided. More than anything I'm not bigger than a team," added the 36-year-old, who has said he will decide his future in September. His current contract expires at the end of the season. McLaren has sounded out Renault and has also indicated it would support Honda moving to Red Bull-owned Toro Rosso. Honda said after Spa that it could find nothing wrong with Alonso's race engine, but the driver expressed surprise that anyone could suggest he had faked a failure. "It seems people forget that I'm racing here for three years, giving my maximum ... I tried to race with a broken rib in Bahrain," he said, explaining that sensors had started to fail and something had felt wrong. "We retired the car, and they checked the whole engine and it seems everything is fine ... so we will try to fit that engine tomorrow (in the second practice). If it blows up, we will change it," he said. Alonso expects to start Sunday's race at the back of the grid due to penalties for further engine changes. Regarding his future, he said he would start discussing with the team and Honda their expectations for next year and look at what was on the table. "I think we do have now some ingredients to be champions," he said. "I think the team did improve a lot in the last three years ... I think we have the talent in the team, we have the facilities. "We just miss (being) more competitive. We will see what the numbers are saying for next year and after that try to make a decision." Asked whether he thought Honda could be competitive in the short term, he replied: "I think you never know. It could be possible. Why not?" Reporting by Alan BaldwinRelated Video: