:: rawblogXport ::

:: Monday, December 05, 2005 ::

Detroit's next big problem - By Eric Peters, Roanoke Times, VA
Wal-Mart new-car pricing, and volume, may soon be coming to a dealer near you.
And the prospect is making Detroit uneasy.

A Chinese autoworker currently earns the equivalent of $2 per hour -- vs. $60 per hour, on average, in wages and benefits earned by an American autoworker. That alone gives Chery Auto (and other Chinese car companies, of which there are at least six at present) a tremendous competitive advantage, shaving thousands off the cost of building a car relative to what it would cost to do the same job in a U.S. plant. (General Motors estimates that its union/pension obligations alone add about $1,500-$2,000 to the 'build cost' of every new vehicle -- and points to these add-on costs as part of the reason it is losing customers and may even freefall into bankruptcy.)

Then there is the absence -- or near absence -- of expensive-to-comply with occupational safety and health and environmental regulations in China.

posted 5:05 AM :: reference link :: 0 comments ::

-------------------------------------------