According to this MIT analysis, manufacturing labor cost = 6.5% of new car cost. Corp overhead 7%.

[Hannah Bell]

http://msl1.mit.edu/classes/esd123/vyas.pdf

Check p. 2-3.

[UrbScotty]

1. Things that make you go 'hmmmmmmmm...'

[jgraz]

2. Well, now it will be just 3.25% after they cut the UAW salaries.

:banghead:

[ColbertWatcher]

3. Excellent find, Hannah!

I tried to say that a while ago and got the numbers wrong!

Good to see MIT publish this!

[Gregorian]

4. That includes retirement and health.

But if it's all non-worker related, then that's a big deal. Otherwise, it looks like they've combined worker benefits with other things.

[MercutioATC]

7. Employee health and retirement benefits are "Corporate Overhead" in this study.

They're not included in vehicle manufacturing costs or production overhead costs.

[Hannah Bell]

8. nope, labor cost for production isn't accounted as overhead.

[MercutioATC]

10. It is in THIS report.

ONE column addresses "Retirement and Health"...and it's "Corporate Overhead".

If you disagree, please show me where "labor cost" is included in either "Vehicle Manufacturing" or "Production Overhead".

[Hannah Bell]

12. production labor cost = cost of bennies, including retirement.

o/h = exec salaries & bennies.

it's not only workers that have retirees, you know.

"http://books.google.com/books?id=IUZRST_KMvUC&pg=PA17&lpg=PA17&dq=overhead+cost+executive+salaries&source=web&ots=198BXUbGE7&sig=Ob8wjHr6qlMfz3mrcz_zFHGuH0g&hl=en&sa=X&oi=book_result&resnum=7&ct=result"

"two examples of overhead are utilities & executive salaries..."


compensation = cost of wages/salaries & also benefits.

labor's is accounted in labor cost, upper management's in o/h.

[MercutioATC]

13. Normally, I'd agree with you...but that doesn't seem to be the way this report did it.

Unfortunately, they didn't address the issue in the report itself.

[sailor65]

5. The report leaves out some data.

Although labor contribution on external subassemblies is mentioned, it is not quantified. The 42.5% material cost absorbs subassembly labor.

[Hannah Bell]

9. sure, if it's not production assembly, it's bought as "material," not as labor cost.

and not part of the union or retiree costs currently being discussed.

[samsingh]

6. out of the 7% a huge amount is executive pay

[dems_rightnow]

11. How much?

[Trillo]

14. connecting to msl1.mit.edu...

Network Timeout
The server at msl1.mit.edu is taking too long to respond.