The “Jobs Bank” concept was pioneered by Japanese auto companies, who have had a no layoff policy in place for many years. The policies currently in place at Honda and Toyota, which pay workers full salary for an indefinite period, are more generous than job security programs in UAW-negotiated contracts.
With 4,500 workers earning their full paychecks while its San Antonio truck plant was idle this summer, Toyota had more workers in its version of the “Jobs Bank” at a single plant than Chrysler, Ford and GM currently have in all of their factories put together.
Wages for UAW members at Chrysler, Ford and GM range from about $14 an hour for newly hired workers to $28 an hour for assemblers to $33 for skilled trades workers.
Typical hourly wages at Honda, Nissan and Toyota are only slightly lower. Due to the effect of profit-sharing formulas, however, there have been some recent years in which a typical Toyota worker has taken home a larger annual paycheck than a typical GM worker.
The $73 an hour figure is outdated and inaccurate. It includes not only the costs of health care, pensions, and other compensation for current workers, but also the costs of the pensions and health care benefits of retired employees spread out over the active workers. Active workers never receive any of this compensation in any form, so it is not accurate to describe it as part of their “earnings.”
The main reason that Chrysler, Ford and GM have higher legacy costs than the foreign nameplate operations in the U.S. is not because their retiree benefits are much higher. It's because they have so many more retirees. Because the domestic auto companies have been operating in this country for many years, they have large numbers of retirees. But the foreign nameplate operations only started operating in this country 25 years ago, and therefore have very few retirees.
In addition, the overwhelming majority of retirees from Toyota, Nissan, Honda, BMW and Mercedes live in countries where national health systems spread the costs of providing health care across the entire societies.
According to the latest data from the Harbour Report, an independent study of factory efficiency, nine of the ten most efficient auto assembly plants in North America are union plants, represented by either the UAW or the Canadian Auto Workers. (Harbour Report 2008, Media presentation, available at
http://www.oliverwyman.com/ow/automotive.htm)
In addition, when factories are compared by vehicle segments – a compact car plant vs. a compact car plant, a pick-up truck plant vs. a pick-up truck plant – union plants are scored as the most efficient in eight out of nine vehicle segments.
Rick