That Prius Has Blood on It

Tweet Cartoon by Khalil Bendib

End portion of article below; link to original here: http://www.corpwatch.org/article.php?id=15182

In 2007, the Wall Street Journal noted, “Toyota Motor Company...now sets the bar for labor costs in the U.S. auto industry.” Recognition of that influence was echoed that same years by Automotive News: “Toyota is going to set the pattern for the entire industry – wages, benefits and pensions.”

Toyota’s clout was driven by its increasing profitability and market share. In the first quarter of 2008, it passed General Motors to become the world’s largest auto company, selling 2.41 million vehicles compared to G.M.’s 2.25 million. In the U.S in the first six months of 2008, Toyota sold 300,000 more vehicles than G.M.

Toyota’s strategy has been simple: Build good cars; hold wages and benefits down, to the degree possible. And with U.S. car makers in a crisis of plummeting sales, plant closings and mass layoffs, holding down wages is becoming much more possible.

In the U.S., Toyota has set up non-union plants in the South – far from the unionized auto industry stronghold of the Midwest. Blunting support for unionization is Toyota’s practice of paying wages nearly on par with the U.S. auto companies (around $25 an hour in comparison with G.M.’s $26 to $28) – although with much lower benefits.

Meanwhile the Big Three’s falling sales and market share have forced the American companies to adopt, and their workers to accept, two-tier wage and temporary worker schemes eerily similar to those used for years by Toyota – just to compete. And the race to the bottom seems to be just warming up. In September 2008, an internal Toyota memo leaked from its Georgetown, Kentucky plant, laid out management’s plans to cut $300 million in labor costs in its U.S. operations.

In April 2008, the Wall Street Journal reported that Toyota plans to end its practice of pegging its hourly wages to UAW rates, and will now pay new hires only 50 percent above the local prevailing wage. In Kentucky, this would mean a savings of about 12 percent, or $3.00 per worker hour – which, of course, will put even more of a squeeze on the Big Three U.S. auto companies and their unionized workforce.

Barbara Briggs is assistant director of the National Labor Committee in Support of Worker and Human Rights. In June 2008, the New York-based NLC released a 60 page report, The Toyota You Don’t Know: The Race to the Bottom in the Auto Industry. The full report can be accessed via the NLC’s website: http://www.nlcnet.org/reports.php?id=562