DETROIT As bargainers for the United Auto Workers and the domestic automakers try to reach a new contract, many workers say they don t understand why the companies are so focused on the cost of labor.
By most accounts, labor expenses for General Motors Corp., Ford Motor Co., and Chrysler LLC amount to about 10 percent of the price of a new vehicle, including wages, benefits, and legacy costs for retiree pensions and health care.
So some workers don t buy the companies logic that they have to erase a roughly $25-per-hour labor cost gap with their Japanese competitors Toyota Motor Corp., Honda Motor Co., and Nissan Motor Co.
Nissan, Honda, and Toyota all pay about the same wages as the Detroit Three. The companies say the cost gap comes in other areas such as health care for active and retired workers, absenteeism, paid days off, and the jobs bank, in which workers get most of their pay when laid off.
But the union likely will focus the contract talks on the nonlabor costs of building cars and trucks, much of which is controlled by the companies. The pacts with the Detroit Three expire Sept. 14.