Economics
Detroit-to-Mexico Shift Predicted After Auto Union's Big Victory
- Moves will be gradual, with U.S. vehicle sales nearing a peak
- Carmakers will use lower-paid temps to help hold down costs
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The most lucrative contract negotiations for the United Auto Workers in more than a decade won’t add a lot to carmakers’ costs, even though each company committed $2 billion or more for raises, bonus money and benefits.
In exchange for improving pay and health care, General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles NV can boost production of a few cheaper, lower-margin passenger cars in Mexico, where employees average about $5 an hour compared with as much as $29 an hour in U.S. factories.