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:: Tuesday, March 18, 2008 ::
Detroit: Are Jobs Returning? - By Keith Naughton, Newsweek.com
Why would the automakers hollow out their factories? Because last fall the Detroit Three cut a deal with the United Auto Workers union to allow them to pay some new hires half the wages of, and far fewer benefits than, current workers. These new hires will make as little as $14 an hour, compared with the $28 an hour earned by the workers the automakers are attempting to cashier. What's more, the outgoing workers have generous pensions and retiree health care benefits. The incoming workers will have 401K plans and no traditional pension or retiree medical benefits paid for by the company. Add it all up and the workers that are leaving cost the automakers $78.21 an hour, including benefits, while those who replace them will cost an average of $25.65 an hour. That downshift will save Detroit billions, which it desperately needs to get back in the black.------------------------------------------- posted 6:33 AM :: reference link ::
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