Frank Bernheisel: The View From Here
Frank Bernheisel
Frank Bernheisel
Posted 03.23.14
Just Outside Washington


A small price to pay for fairness

I just bought a new Dodge Caravan to replace the 1997 Caravan with 160,000 miles. The new one cost $22,000 including taxes, etc. The new Caravan was assembled in Windsor, Ontario, Canada. I purchased the Caravan though a dealer and talk about a big waste of time -- but I digress.

Even though the Caravan was assembled in Windsor, 82 percent of it was made in the U.S., based on the NHTSA 2011 American Automobile Selling Act Report. Chrysler just invested $1.6 billion in the Windsor plant. The new body shop is highly automated with 1,056 robots and 554 UAW staff, plus 35 salaried supervisors; the plant employs a total of 4,500 hourly workers.

It is a union shop and the UAW contract has New Hire wages at $19.28 over the term of the agreement. New Hire workers will be eligible for tuition-assistance programs, health insurance with a $25 co-pay, life insurance and pension. Seniority results in higher wages. Not a bad place to work, based on the numbers.

I thought about buying a Toyota or Nissan minivan, which are 75 and 0 percent made in the U.S. respectively, according to NHTSA. (This may be incorrect or out of date because Siennas are assembled in Indiana.) However, the Washington Post recently ran an article about the Tennessee factories that make cars and trucks, pointing out the many of the employees are contract workers and not employees of the car companies.

As contract employees, the workers are paid $10 to $18 per hour, which is about half what the Nissan employees at the Smyrna, Tennessee, plant make. The Washington Post reported that a majority of the 7,000 workers at the plant were contract employees. The contract employees can buy health insurance at about $57 per week. After four years, they are eligible for two weeks of vacation. The Smyrna plant workers have voted against unionizing the plant, as did the Chattanooga VW plant. Maybe there is something in the water in Tennessee.

According to the Bureau of Labor Statistics, the number of contract workers in Tennessee increased from 51,867 in 2009 to 80,990 in 2012. The median wage stayed flat during the period. There are similar patterns in other states.

Auto plants are highly mechanizes with robot and computer-controlled parts delivery lines. These machines still need to be operated, fed, and maintained by workers. Despite the manufacturers having removed some of the back-breaking labor out of manufacturing, these are still tough jobs. It only takes 20 to 25 labor hours to build a car with all this automation. So my new Caravan would cost $250 more or $22,250, if the people building it were paid $29.28 to start. In Tennessee, the Nissan workers would get $20 to $28 per hour and maybe a few benefits as well.

Comment: $250 per car seems a small price to pay to give decent wages to the people who make our stuff.