Big benefits for CAW, big subsidies for Big 3

Canadian auto makers have succeded in getting a bailout despite a record year for sales. Maclean's estimates the newly announced government payout amounts to $2,300 per vehicle. Even so, the combined $20 billion or so from Canadian, U.S., and Ontario governments may still not be enough to keep GM, ford, and Chrysler in business, leading President Bush to talk about a so-called managed bankruptcy. Economist Mark Zandi estimates that the Big 3 would need $75 billion at best and $125 billion at worst just to stay afloat. While Japanese companies are earning anywhere from $1,152 to $2,051 per vehicle, The Big 3 are losing anywhere from $515 to $1,833 per vehicle.

Maclean's reports that on average, Canadian auto workers make $35 per hour--$72,000 per year. On average, a manufacturing job fetches $20.75 per hour, or $41,500 per year. The wage difference between Japanese car makers and the Big 3 is only $2.50 per hour ($5,000 per year) but the difference in benefits is enormous.

According to CAW data, workers at GM, Ford and Chrysler cost their respective employers about $77 an hour. This figure includes employer-paid benefits like health and dental insurance, the company’s contribution to a pension fund, and the payroll taxes it assumes when it hires workers. By contrast, assuming an 80-cent loonie, their counterparts at transplant car mills in the U.S. come in at a much cheaper $61.25 an hour. The biggest contributor to the disparity is legacy costs, i.e. payments and benefits doled out to former workers. These add $10 an hour to the overall labour costs at unionized plants, while better vacation and other wage-related benefits at union shops makes up the rest of the difference.

Other hidden benefits? How about $17 million worth of viagara for GM or up to 30 hours of free or discounted legal services for every auto worker?