Are Low Wages and Unskilled Labor a Detriment to Auto Makers?

These should be the best of times for Mexico's auto industry. The country produced a record 2 million cars and light trucks last year, exporting three-fourths of them, while more than $4 billion in foreign investment poured into the sector. And the government anticipates much more as Detroit's cash-strapped automakers head south for cost savings.

Mexican assembly workers average just $3.50 an hour plus benefits, compared with about $27 hourly plus benefits at a GM or Ford plant in the U.S. But less skilled workers at parts makers such as Delphi Corp. in Mexico earn as little as $1.50 per hour, and their benefits are skimpier because unions are weaker in the fragmented parts industry.

Two years ago Ford embarked on a $1 billion expansion in Hermosillo, which employed 1,200. The company sat down with union leaders and pledged to create as many as 2,000 more jobs, as long as workers agreed to flexible work rules and lower starting wages. Today, the union says, about half of the factory's 3,000 hourly workers earn $2 an hour--just half what those with more seniority do. "It's a reality we cannot deny," says César Flores, president of the Mexican Automotive Industry Assn. "An assembly plant now creates fewer good jobs."

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Loki123 - 3/30/2007 12:39:10 PM

+3 Boost

Don't mistake low wages for unskilled labour. Huge difference.

Are low wages a disadvantage to Detroit = NO
Are unskilled labourers a harm to Detroit = YES

Some of the best trademen in the world make $7.00 per day. Some of the worste make $200 per day.

TruenoAE86 - 3/30/2007 2:42:23 PM

0 Boost

"Some of the best trademen in the world make $7.00 per day. Some of the worst make $200 per day."

Tell the UAW folks about this.

Loki123 - 3/30/2007 1:51:30 PM

+2 Boost

IS3andME,

You're asking a political question in an automotive site - but I'll bite.

Illegal immigrants are here for many reasons, primarily because they lack necessary social resources like food, water, shelter but also due to war, health, family reunification, poverty, slavery, prostitution, to name a few.

No one can demand a "country" provide more jobs or money. Read up on "capitalism"...

Finally, who ever said illegal immigration is a bad thing for the US economy? I'm sure a lot of business owners benefit from the cheap labour. Unemployment is also good - it tends to reduce inflation.

Anyways this is a car website - we should try and stay focused.

thecar - 3/30/2007 2:34:29 PM

+1 Boost

>>Why can't they demand that their countries provide >>more jobs for them so they don't have to leave their >>countries.

isnt the topic says Mexico =p ?

American either needs to get more skillful or more efficient. American cars only stand out beocoz of cheaper / deeper discounts . Reliability is not much different from mexico made ones. If mecican made more reliable cars, u bet all factory will be moved.

truecarlover - 4/1/2007 1:38:03 PM

+1 Boost

This country will not stop allowing floods of immigrants. The reality is that we need the cheap labor so that consumers can keep spending there money on what they see as "good buys". Without these immigrants the cost of everything will go up - consumers will spend less - then companies will have to start laying off - and then we spiral down into recession. This country was and will continue to be built by immigrants. Once it was the Germans, then the Irish, then the Italians and always the Chinese. Now it is Mexicans and Bangledhesi's. As to Roller215's question about Mexicans - of course they are still there. People have made that same ignorant comment to me here in NY about Jamaicans. My family comes from there and as I stated to the person - The relatives I have that stayed there was because they were successful. Bar-none the U.S. offers more opportunities than other places - it's not that other places don't still offer opportunities at all - nor does it mean that the quality of life here is ALWAYS better. The economy in Jamaica is not diverse enough to absorb all the people who even graduate college there every year (let alone unskilled workers)- so many migrate in order to use their skills. It's not because they want so much to leave their homeland. Lastly, I do believe issues such as this are necessary to discuss because world affairs affect the car industry. I just hope people discuss based on fact and not on prejudice opinion. Capitalism dominates the globe - so economics and history are important. Just yesterday I was helping another car enthusiast move and we both shared facts we learned about the Autobahn and why Hitler had it developed....which once the U.S. got wind of it they decided to later build the Interstate system. If you know the history you would learn the Autobahn was about military strategy and not so that we car lovers can drive 155mph for fun (something I have yet to experience for myself).

truecarlover - 4/2/2007 10:44:23 PM

+1 Boost

Of course I know what slavery is - didn't you read when I said my family comes from Jamaica?? I never implied that exploiting vulnerable workers is a good thing - I'm just stating that is what happens in this world we live in. I'm a realist - I don't keep my head in the sand.