Detroit Automakers Bring Wages and Benefits in Line With Toyota

GM, Chrysler and Ford have closed the wage gap with Toyota and are now paying roughly the same amount to their hourly employees, according to the Center for Automotive Research.

For instance, economist Sean McAlinden told the Associated Press that the total cost of wages and benefits now cost GM approximately $58 per hour compared to $56 per hour for Toyota. In fact, in the next few years Detroit’s wages will decline further because it will be hiring fewer skilled-trades workers and hiring more workers at a lower, post-bankruptcy wage.

This could lead to Toyota paying as much as $10 more per hour than its American rivals by 2013 unless the Japanese automaker follows GM’s lead.

In 2007, GM paid an average of $1,400 more per vehicle than Toyota in North American labor costs with most of this coming from a $950 charge to fund health care for retirees. Economic woes and bankruptcy filings allowed Chrysler and GM specifically to change the dynamic by negotiating with the United Auto Workers. The union agreed to cut the wage for new hires in half to $14 an hour, while also reducing pension and health benefits. Automakers also transferred retiree health-care costs to a trust run by the UAW.

The remaining wage gap for Detroit now lies with salaried workers, who make an average of $122,963 compared to $81,506 for competitors. A cynical person might note how quickly the automakers were able to slash wages and benefits for their lowest-paid workers, while a $40,000 discrepancy for well-compensated salaried employees remains entrenched.

GM, Ford, Chrysler Finally Near Wage Parity with Toyota (DriveOn)



I'm not surprised that GM was under-paying their employees while turning out inferior vehicles. Ever since the bail-out the company is nothing but a shill for the Government. This Veteran will never again even consider a GM car or truck.

I think you miss the point. Because of union deals the domestic automakers were paying far MORE than Toyota was. Part of the bankruptcy and recent problems have allowed them to lower their obligations and pay to closer to what non-union automakers like Toyota are paying.

I'm looking to buy a Toyota Prius and I am wondering about the benefits of the car in the realm of savings. For example are there any tax credits, can I use the car pool lane when driving solo, etc.


I think the conversation should be how much MORE the presidents and VP's are making over the line workers of ALL the automakers. The average gap has to be well over six figures. Maybe if there was a little MORE profit sharing with the "little guys" we wouldn't be talking about this. You gotta love how the automakers let the "little guys" fight over leftovers...


Jay - I couldn't agree more. Is there a business sector where this isn't the case?

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I wanna get a toyota prius but my fiance doesnt want me to get one because it might cost too much to service since its a highbrid. How much does it actually cost to service it?

Should Detroit automakers be bailed out? If people can't afford to buy cars or gasoline, what's the point in having automakers?

Kent McMillen

It's gonna get interesting, when Toyota tries to cut wages, and the UAW starts to organize their workers, with the promise of helping them hold the line against pay cuts.


As a former paint tech on the Toyota line I can tell you first hand the factory lines would never unionize. Upper mgt takes care of the workers by doling out lots of awards and bonuses. Everyone felt they were appreciated and fairly compensated without the politics or dues going to some fat cat. I've heard it's the same at Fuji/Subaru. The old Detroit brands are just starting to learn but they have a long, long way to go.

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