Something like 50-60% is normal for firms who give top-notch benefits.

My (very small) company runs at more like 35-40%, and our average hourly wage is 1/2 of GM's. Our benefits are nothing like as good as GM's, but they aren't stingy either, better than what most firms our size offer at the wage levels we pay.

That's also seems like an awfully high wage rate for hourly workers, but considering the rate of overtime in the auto industry, if they are averaging out per actual hour worked, that may make sense. The quoted amounts of overtime per worker seem awfully low, actually, an average of less than 8 hours a week per worker. My father-in-law describes the standard motor city blue-collar work week as between 55 and 72 hours from when he came up as a toolmaker at chrysler to being COO of an area tool-and-die company. I fondly recall a dinner conversation where he tells the story of turning down a potential client's request for his company to do a 72hr schedule by saying “Since we started this business, I haven't made anybody work a Sunday, and I'm not starting now.”

That said, he's been out of the business since 2000, so perhaps bad times have cut into the OT.

From what I've heard – yes. Many companies let their pension funds get, ah, 'a bit behind', because the top guys could declase a larger profit, and get larger bonuses, and there was insufficient enforcement. This was especially bad in 200 and the next few years, because many companies had gotten used to 10% or so growth in invested pension funds, and were baking such growth into their projections. When the stock market delivered actual losses, they simply assumed that the stock market would make it up in future years.

-Barry

The largely implies legacy costs are less than $9/hour, but only assuming Toyota's legacy costs are negligible. Which is probably true, but I thought I should point it out. Since this is a difference versus toyota, the true costs are that “largely” – some fraction of $9 – plus Toyota's excess costs, whatever those may be. Which is why I rounded up so much.

A further additional quibble is that this statement was about what the situation would be in a few years if a this new contract takes effect, not what it is right now. Which means one could slant the numbers in various directions with assumptions about what happens in the meantime.

You know, GM is being really disingenous about their 'legacy costs'. Why weren't retiree pensions funded year-by-year as they were earned. Why are they being accrued now? Did someone underestimate or worse lose funds through bad investments. Also, IIRC General Motors self-insured health benefits. Did they 'forget' to fund those accounts too?

Oh and they recently agreed to let the UAW take over responsibility for retiree benefits but, oops, they don't have the $25bn they agreed to transfer. Um, $25bn. Where did I hear that number before? Oh, yeah. That's how much they asked Congress for.

If a hypothesized future $9/hour excess largely is due to legacy costs, that implies said legacy costs are no more than $9/hour. So we can now subtract that from $73 to say the GM workers are being paid “over $60/hour” including benefits but excluding benefits to prior retirees.

http://www.record-eagle.com/business/local_stor...