White collar salaries to overtake UAW labour costs next year

According to a top researcher, labour costs for salaried employees at Chrysler, Ford and General Motors will surpass those of workers represented by the United Auto Workers for the first time next year. A report in Automotive News says the calculation was performed by the Center for Automotive Research (CAR), and made public at a recent conference.

Sean McAlinden, chief economist for CAR, explained the math like this. The Big Three's 66,000 salaried employees make an average of $122,500, or just over $8 billion USD in wages. That's a little more than the $7.9 billion USD that 115,000 hourly workers will take home at roughly $69,000 each.

Until 2009, McAlinden said, hourly employment had a decisive edge in total compensation, but plant closings and a paring down of the blue collar workforce have left salaried employees accounting for about 37 per cent of the Big Three's American workers.

Is this just another sign of a shrinking UAW, or something more significant? It's hard to say, but the article hints that salaried workers could be the next targets for cost-cutting: "McAlinden said a recent pledge by General Motors CEO Dan Akerson to cut vehicle platforms by half and consolidate advertising with fewer agencies recognized that salaried labour costs are mounting."

News Source: Automotive News - sub. req.