Pay for Performance - Your Issues Are Small Compared to Uncle Sam....
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The Cost of Talent - Upcoming UAW/Detroit Talks...

Think you have problems on the Talent cost structure front?

Let's keep it in perspective.  You have concerns.  Ford has problems.

It's that time again - time for the next round of labor negotiations between the Big Three (Ford, GM and Chrysler), but this time is the rumored standoff for real?  After all, Ford recently put up all their assets to fund their latest turnaround bid - ALL THEIR ASSETS...

From the Wall Street Journal:

"This time they mean it. The Big Three (General Motors, Ford, and Chrysler) have talked toughFord before. They were going to wring concessions out of the UAW in contract negotiations, only to retreat and agree in the end to a costly new labor deal. This time things are different. The Big Three are hemorrhaging money. They say they have to eliminate or narrow the $30-dollar-an-hour cost disadvantage between themselves and their Asian rivals like Toyota, Nissan, and Honda. They have to do something about legacy costs. If the UAW doesn't bend, the companies say they are willing to move investment in plants and people outside the US. The UAW leadership understands the problems and has agreed to some work-rule changes and benefits cuts designed to save money. But the concessions have been small potatoes compared to what the companies say they need. The UAW's leadership has been maneuvering for a couple of years preparing members to cuts. But how far will they be willing and able to go?

That got me wondering what the total talent cost structure was for Detroit automakers.  Here's a clip from the AP I found:

"Detroit News columnist Daniel Howes, citing people familiar with Ford's bargaining strategy, reported earlier Wednesday that Ford would seek to cut hourly labor costs by 30 percent, from about $71 to around $50, including wages, pension and health care.

The costs then would be comparable to those of Asian automakers, who pay similar wages but have far lower pension and health care costs, and make thousands of dollars more per vehicle than the Detroit automakers do."

For those of your scoring at home, that's an annualized total comp cost of around $148,000 per FTE, vs. $85,000 for the foreign automakers.  All I can say to that is "Wow"...


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