Yeah, and they are non-union.
Toyota is non-union. Honda is non-union. The costs of union labor is much higher, than that of non-union. This is well documented.
It's a little dated, but still fairly accurate to how different the cost of labor is, between Ford and other Domestic unionized automakers, and the Japanese ones.
But again the point is, with larger, higher value you vehicles, the domestics can still be profitable. But for smaller cheaper cars, the Japanese makers have a huge advantage that they can produce lower value cars, and still make a profit because of the lower labor costs.
No amount of intelligence can change that fact for the domestics.
Can you prove that an american building a honda is paid less than an american building a ford
Need numbers
Do you mean other than the New York Times article directly detailing the difference in labor costs?
Foreign automakers pay from $38 to $65 per hour to non-union workers
As it stands, per-hour labor rates including benefits are $58 at
General Motors, $57 at
Ford, and $48 at
Fiat-
Chrysler
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.
There you go.
Toyota to Close Only Union Factory In U.S.
There will be little celebrating come Labor Day for the thousands of union workers who’ve been anxiously waiting for the news they did not want to hear: In March, Toyota will close its New United Motor Manufacturing (NUMMI) plant in Fremont, California.
It's the company's only unionized plant in the United States.
My understanding was that Toyota had no more union plants in North America. In fact, I knew a girl who accidentally said something about unionizing (out of frustration) in a plant in Canada, and was fired the following day.
As far as I understand Toyota is absolutely not Unionized.
Well since ford pays so much perhaps they should hire some Jap engineers who could figure out how Ford can make a profitable car before Ford loses 100 percent of the American car market share.
They can start by putting a muffler on the mustang that is not a thousand dollar option
Lol
See neither you or ford can win as an American by giving away share to Japan and Germany
Well again... if the labor costs too much, there is no way to 'engineer' lower costing labor.
I mean you do realize that tossing expensive engineers at a money losing project, does not always equal making it profitable, right? My uncle was an engineer. He was pulling down $150K a year. You throw multiple teams of engineers on a multi-year project, and that is easily millions or billions of dollars.
Why Does It Cost So Much For Automakers To Develop New Models?
The rough estimates, are that it takes an average of four years, to go from concept to production. Four years, to get a car from a pencil sketch, to a working model.
During that time, the company will spend on average, between $1 Billion at the low end, to $6 Billion at the top end.
And then you have to recoup that cost, by selling a $20,000 car.
View attachment 289978
Ford's profit margin is barely 8.7%. But I wager that the profit margin on smaller cars is less than half that, because that's the average profit margin, which includes all of Ford's much higher priced vehicles.
But 8.7% of $20K, is a profit of $1,740 per car. How many cars do you need to sell, to make back just a Billion dollars in capital investment? Ford's top selling passenger car, only sold about 100,000 last year. It would take years on years just to break even, and that assumes that the profit margin is 8.7%, which for low end cars I promise you it isn't.
We don't have exact numbers because most manufactures keep that information hidden. You can estimate based on shareholder relations publications, and we can see how much money was spent on R&D, and see profit levels from different divisions. But it's still an estimate.
However, while all this is interesting, it misses a key problem.
The key issue with your logic, is that you are ignoring market reactions.
Let me explain. You are thinking that if they simply hired enough engineers, they could perhaps engineer a cheaper product. Like if you hired engineers, and they designed a cheaper engine, that cost half as much, and still performed as well.
And that is in theory possible.
But the problem, is the market will react to that. The market doesn't just sit there, and let you take over.
Say you open a lemonade stand, and someone opens another stand a block away from you. You are just barely making a profit, and you look down and see they are selling the same lemonade for a $1 less a cup. You start investigating. How are they doing that? You find out that they were buying straws in bulk, while you were buying little 10-packs that are expensive.
What are you going to do? You are going to also start buying in bulk, and then lower your price by $1, so you avoid losing customers and going out of business.
The same is true everywhere. Yeah, you might hire some engineers that design a cheaper engine that is just as good. But the moment you do that, Toyota is going to look over, and investigate this cheaper engine, and then design their own cheaper engine.
Then you are back to the same situation you were in before, where the cost of Union labor, is still higher than the cost of Japanese non-union labor.
Whatever money saving engineering they do at Ford, or GM, or Chrysler, is all going to be looked at, investigated, and designed by the Japanese or other companies.
And in the end, it will be back to a difference in labor costs.
There is only one solution that will allow domestic auto manufacturers to compete with non-union manufacturers.... get rid of the Unions. You have to lower the cost of labor, and then you can compete on equal grounds. No amount of engineering is going to fix that.
