In an interesting report that’s surfacing right now, Germany in 2010 produced 5.5-million vehicles compared to America’s 2.7-million while spending an average of $67.14/hour versus America’s average of $33.77/hour. That means Germany is not only producing twice as many cars as America, but also paying twice as much.
The article, published by Remapping Debate, states 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.” In other words, IG Metall – the equivalent of America’s United Automobile Workers (UAW) – strive to guarantee high wages and good working conditions for autoworkers. Literally all of Germany’s car workers are members of IG Metall and even though they can strike, they hardly use the right because of a thorough conflict resolution system.
So really what’s the major difference? The fact that German manufacturers are able to get away with so much more in America, since union-management relations in the US are adversarial while in Germany they’re collaborative. Volkswagen‘s Chattanooga plant for example pays their non-unionized employees $14.50/hour, which increases to $19.50/hour after three years. And BMW, who has an operating plant in Spartanburg, South Carolina, had no difficulties adapting to the Spartanburg business culture.