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Wes,

Here is how it is calculated.

Real GM hourly wage is $28/hour
Toyota Georgetown (Kentucky) pays $27 to $30/hour
Adding in GM benefits, the current employees cost about $51/hour
At Toyota, they cost up to $55/hour including benefits
So where does this $75 number come from? Where is the wage gap where GM is getting killed on cost?

Look at the retirees.

When you add in retiree health benefits, you get the $75 number. Toyota just doesn’t have as many retirees here in the U.S. because they’ve only employed people for about 20 years.


Consider this: At the end of 2007, GM had 365,000 retired hourly employees, as opposed to 62,000 active hourly employees.

When you have roughly SIX retirees for every worker, that seems pretty unsustainable. That’s the problem right there. That’s the way Social Security is bound to look some day, but that’s a different discussion for a different blog.