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How Germany Builds Twice as Many Cars as the U.S. While Paying Its Workers Twice as Much

Posted by john vanlandingham 
john vanlandingham
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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/


A little inconvenient fact which goes counter to what people i regard as idiots have been saying is a immovable fact.... Now I know that the bulk of the people who espouse idiot right-wing bullshit have never worked in any other economic system, and with near certainty I know they know no US History except comic book level stuff in 4th Grade or AM Talk radio..
And I'm fairly certain nearly none has any idea of US Labor history---much less any even superficial awareness of any other country's labor history,

But here's some stuff to make you think.....
Quote

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.”
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Why Saab Had to Die Frederick E. Allen Frederick E. Allen Forbes Staff
15 images Photos: The 15 Best Companies To Work For

Mund points out that this goes

against all mainstream wisdom of the neo-liberals. We have strong unions, we have strong social security systems, we have high wages. So, if I believed what the neo-liberals are arguing, we would have to be bankrupt, but apparently this is not the case. Despite high wages . . . despite our possibility to influence companies, the economy is working well in Germany.

Verrrry Interestink, Smart......


*
IG Metall...German: Industriegewerkschaft Metall, "Industrial Union of Metalworkers'"winking smiley is the dominant metalworkers' union in Germany.

The article says its the equivalent of UAW. Wrong, the smarter countries in Europe didn't go for the fractured craft union models but whole wide areas, Metal workers of all sorts...not just autoworkers....

Interesting read even if they sometimes quote wages and sometimes total wage costs--ie employer contributions too.



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Pete
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Re: How Germany Builds Twice as Many Cars as the U.S. While Paying Its Workers Twice as Much
December 27, 2011 05:22PM
I thought they were profitable by using imported Eastern European labor and charging out the ass for crappy cars that fall apart in three years.

Could be wrong about the labor thing, but it's a standing joke that no new VW is completely functional, and they only get worse over time.



Pete Remner
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Edited 1 time(s). Last edit at 12/27/2011 05:23PM by Pete.
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HiTempguy
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Yea, weird how VW`s for sale in NA are built in Mexico, that couldn`t possibly help pay high wages back home to make up for the slave labour in SA!
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NoCoast
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Are you kidding me. Average wage for US autoworker is $70K?
German ones are almost 140K average?
I want to see how they come up with these numbers.

MB and BMW both build some parts of their cars in the US.

Auto industry accounts for 1/7th of workforce in Germany.
How much do they pay the non-union temporary work force? One article I found from 2008 said the downturn could result in the loss of 20,000 auto industry jobs and 80,000 temp jobs. Also said BMW eliminated 8000 jobs, 5000 of those temporary. So the only logical thing in my mind, is that all the shit jobs are being done by temporary workers who are probably getting paid shit, while the union cush jobs are held by the skilled workers and engineers.

But more likely what is happening is the same thing that happened back when the auto industry got it's bail out and all the Tea Party douches were in an uproar and said, "But they make $70 an hour at these factories! How can we justify bailing out an industry so corrupted by unions!"

"Analysts came up with it by including the cost of all employer-provided benefits--namely, health insurance and pensions--and then dividing by the number of workers. The result, they found, was that benefits for Big Three cost about $42 per hour, per employee. Add that to the wages--again, $28 per hour--and you get the $70 figure. Voila."

So without knowing what their methodology is, I call bullshit.

In 2009 they exported 3.34 million cars. The rest must be made elsewhere.
The industry has a workforce of about 723,000.
The average is probably even more misleading as how many corporate salaries are being incuded? It's probably safe to assume that 50% of their manufacturing and lower paying jobs occur outside of Germany as well.



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john vanlandingham
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Grant, slow down. or learn to read better. It said the average wage for Metall Union workers was 67/hr with salary, and benefits (and all the other stuff; unemployment insurance, disability insurance etc) and that that $67 is "twice" what the "average" (you know what that means---well maybe the writer does) US autoworker wage.


And if you read the link you'd see that some in the Blighted Zone of USA pay
"At Volkswagen’s Chattanooga plant, the nonunionized new employees get $14.50 an hour, which rises to $19.50 after three years."

Thats about $29,000 to begin with and rising to just under $40,000.


Also, there are no shit paying jobs in Germany, or most of civilised Europe.
Pay is "average" or nobody will take it.
And IG Metall in Germany, Metalarbetarna in Sweden set the standard or target...

Sure methodology is highly questionable, but thats just getting to the infinitesimal %, the main thing is US Corps hiring professional whores in the halls of legislatures and other professional whores in front of cameras have whined for decades that they need to lower US wages ( cough cough while raising executive compension to the average 456 times the average workers wage) and a core 15-23% of idiots buy their lies---and vote accordingly.



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Ken Rogers
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^ So true.
While the mushroom farmers feed us the 'rugged individualism' and 'trickle down lies'.



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In relation to the article John posted, it talks about how labor & mgmt work together to solve challenges raised by one another.

A friend of mine worked at the Ford plant here in St. Louis and when it closed down, he was offered the opportunity to go to a different plant in another city.

He chose to go to Detroit and work at the plant that made Mazda 3's I believe. He tells how when he and his fellow St. Louis colleagues got there, the in place workers would work with management to solve problems without resorting to more formal "this is/ is not" in our contract, we are/are not going to do it that way. The plant was quite efficient. When the St. Louis folks showed up, they started raising a ruckus over how their fellow workers were not following the contract yada yada yada. Efficiency went down and animosity between management and labor went up.

So yeah, issues can be hashed out and everyone can be happy. But when a wrench gets thrown in the works, people suffer. My friend, got bought out by Ford, moved back to St. Louis and now works selling cell phones at the mall.

Also, did anyone take into account all the taxes Germans pay vs. what a U.S. worker pay? One figure I saw said a rate of up to 42% for the income stated. I correlated this from two different sources.



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john vanlandingham
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Quote
Vorpal_Rally
In relation to the article John posted, it talks about how labor & mgmt work together to solve challenges raised by one another.

A friend of mine worked at the Ford plant here in St. Louis and when it closed down, he was offered the opportunity to go to a different plant in another city.

He chose to go to Detroit and work at the plant that made Mazda 3's I believe. He tells how when he and his fellow St. Louis colleagues got there, the in place workers would work with management to solve problems without resorting to more formal "this is/ is not" in our contract, we are/are not going to do it that way. The plant was quite efficient. When the St. Louis folks showed up, they started raising a ruckus over how their fellow workers were not following the contract yada yada yada. Efficiency went down and animosity between management and labor went up.

So yeah, issues can be hashed out and everyone can be happy. But when a wrench gets thrown in the works, people suffer. My friend, got bought out by Ford, moved back to St. Louis and now works selling cell phones at the mall.

Also, did anyone take into account all the taxes Germans pay vs. what a U.S. worker pay? One figure I saw said a rate of up to 42% for the income stated. I correlated this from two different sources.

Lee there's lots of problems with the article but you got the main reason why I posted it....
Funny how on several forums the American boys all fixate on the "exact dollar" type shit, the typical superficial materialist things that they are going to "prove" its wrong (by a few% and therefore it's totally invalid---typical American boy dominated forum shit)
But the points about a mechanism to countact the "race to the bottom", and about the Union fighting (all thru the 50s and 60s) to get a law allowing Union or workers representitive to sit on the board of directors (or equiv) was right over the most guys head...

If you have time the comments section is as good, or better than the article icluding comments from actual live Germans who poo poo any "Nationalistic" rationale in their choice of buying German products, they say stuff like "When I am going to buy a car it is to keep, so I consider the quality, the cost of running it, the cost of repairs over the longer term"....



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derek
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People never seem to understand that the dollar per hr of a wage is not important, the dollar amount per unit of production is very important.

Unions and management should agree far more often and be in conflict far less often as their long term health is really fairly closely matched. Unions tend not to be all that happy when the airline, auto maker, etc go out of business and companies need to focus on productivity not wages.



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wildert
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We have the same system in Denmark. Actually even more well developed (some would call it less... But nevertheless it's rather unique....).
The government, the union and the employers organisations get together once every second year, and they negotiate a framework for salaries, benefits, etc. They reach a compromise based on the workers demands for raises, more benefits, etc., the employers need to be competitive and keep cost down, and the governments need for the state to run smoothly, keeping the economy rolling, etc. Rarely the government intervenes much, but it has happened at times when an agreement couldn't bee reached by the two other parties on their own. These two parties always know that the government can legislate the next 2 years deal if they can't agree themselves, so most times they figure it out. In my time we've had 2-3 major strikes that I can think of, and only once did the government pull the 'cause I so!'-card.
It works pretty well, and is know as "The Danish model".

Also, that whole "working WITH the management thing" is really something where US and Denmark differs. And I've seen it first hand working with americans here n Denmark. They tend to NEVER question the boss, no matter how moronic he may be, and no matter how much the boss would benefit from getting and listening to an oppinion of somebody actually doing work. Granted I'm not exactly in assembly or production type of job, but still... Bosses aren't always right, and here in Denmark it is accepted and expected and RESPECTED for an employee to speak up about things that could be changed to better this or that. In fact it is encouraged.
I don't see the americans I have worked with, using that possibility as much... They've been more into the taking shit game, and the bitching about it. I can totally understnad why, if theyre used to getting kicked on the street for that, but it's hard to look at as a consultant.



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Some companies encourage that, some don't.

Usually with in the same company some managers do so more than others.

my last job i went from an open door policy boss. who you could always go to and point out how we could be doing something better.


to a Closed door, chain of command only, we will tell you What your opinion is type of boss.
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derek
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Then again cars are a small part of the US economy and not too many people would say that cars are the part of the US economy that is innovative, forward thinking, and the path to our future.


http://www.nytimes.com/2012/01/08/magazine/the-other-reason-europe-is-going-broke.html?_r=1&src=me&ref=magazine



In the long run reality always wins.
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