Compare and contrast the German and American auto industries

I meant to post this a while ago, but I suppose better late than never.

In 2010, Germany produced more than 5.5 million automobiles; the U.S produced 2.7 million. At the same time, the average auto worker in Germany made $67.14 per hour in salary in benefits; the average one in the U.S. made $33.77 per hour. Yet Germany’s big three car companies—BMW, Daimler (Mercedes-Benz), and Volkswagen—are very profitable.

How can that be? The question is explored in a new article from Remapping Debate, a public policy e-journal. Its author, Kevin C. Brown, writes that “the salient difference is that, in Germany, the automakers operate within an environment that precludes a race to the bottom; in the U.S., they operate within an environment that encourages such a race.”



Related Articles

7 thoughts on “Compare and contrast the German and American auto industries

  1. Help me out. Does

    “But the case of German automakers — BMW, Daimler, and Volkswagen — tells a different story. Each company produces vehicles not only in Germany, but also in “transplant” factories in the U.S. The former are characterized by high wages and high union membership; the U.S. plants pay lower wages and are located in so-called “right-to-work” (anti-union) states.”

    mean that BMW, Daimler, and Volkswagen pay their people the higher total benefit in Germany but the lower one in America? Wouldn’t that lesser expense in American wages contribute to the company’s profitability? That would mean America’s workers are subsidizing the German workers.

    Just curious as to how you read that statement.

  2. $33.77 more than adequate for an hourly salary for someone working in a auto factory, really could probably be $10.00 less an still would be a good salary for what they do

    1. That is not what they are being paid hourly. It is wage, health insurance, pension, and any other benefits combined.

    2. Hey looky everyone! This guy Bishop fancies himself an expert. Hey, Mr. Expert, seems I pay a lot to go to my dentist, how much should he be making? About $10 an hour? Sounds good to me.. Then there’s Rickie Weeks. I wouldn’t pay him more than $10 an hour, amiright?

  3. Without knowing too much on the subject, isn’t the key difference that German cars have consistently sold well, and American cars have not?

    As long as you’re consistently making profits, then you can afford to share the profits with the workers.

  4. Labor was blamed for the American decline in car sales during the 80s and 90s. Again and again I pointed out that Germany and Japan, with the strongest unions in the world, were taking the market share away from the U.S.

    Management is always responsible for a company’s progress. American automobile management sought to depend on financial and media manipulation, while Germany and Japan depended on the loyalty, efficiency and expertise of their labor.

    1. You’ve squarely identified many of the most important items with paying living wages. Industry today often wonders why their employees no longer have loyalty. Loyalty usually comes with being treated fairly in the work place. That’s long been gone in most large businesses. Most people commenting here suggest workers could and should be paid much less. Those same individuals expect those same workers to afford decent housing in safe neighborhoods, provide for a good education for their children, pay their own medical bills by having insurance, being able to get to and from work with reasonably priced transportation either by their own car or public transportation. They’re also expected to provide for a liveable retirement upon getting to old age. German employers are all required to provide basic health insurance for their employees.

Comments are closed.