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Originally Posted by kangaeru
Actually, GM has exported thousands and thousands of American jobs to Mexican plants, where the average wage is about 2 dollars an hour, compared with about ~20/hour per plant worker in detroit.
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If you could pay person x $2/hr. for the same quality and quantity that person y charges $20/hr for, why would you pay $20/hr.?
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In between 1994 and 1998 when GM went from making all of their Suburbans in the US to about 84,000 in the US and 82,500 in Mexico, the average price of a Suburban increased from 24,500-27,00 to 29,000-34,000 dollars. Considering half of those Suburbans came at a labor cost 1/10th what the workers in Detroit got, shouldn't GM have saved a shit load of money?
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I don't remember exactly, but I read that each GM vehicle has about $1,700 in costs to cover retirees and other costs that others don't have.
When was the last time GM turned a profit? If they are saving money and raising prices, somthing ain't working right. the stockholders certainly have not been happy over the last quarter of a century.
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If Detroit labor costs are 1W (100% Wage = 20$/hour), then 82,500 x .10W = 8,250 . This means that GM can make 82,500 cars for the same LABOR PRICE (this is not overall price in parts of course) that would only build them 8,250 Suburbans in Detroit. So why did the costs go up SO much? Because it went into the pockets of the top 5% of management of the company.
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GM execs make more than those at Ford, Toyota, BMW, Porsche, Nissan, Daimler-Chrysler??
Poor management and short-sighted unions.