Why Japanese Car Companies make Money and American Car Companies Do Not

Ten years ago, GM had about a 33% share of the U.S. market.

Toyota Motor Corp had just 8%.

Today, GM's share is about 24% and Toyota's is 15%, almost equal to Ford.

GM lost $2 billion last year. Ford is happy to reduce its losses to $282 million from $1.4 billion in the first three months of last year.

How much money did those two companies make over the years in order to be able to survive such massive losses over such an extended period of time? Different question.

Toyota, meanwhile, made $13.7 billion last year, up 20% from the previous year.

What's the difference? Why can a Japanese

car company make money and American car companies cannot?

Here is just one contributing factor –

Ford paid its workers on average $70.51/hour last year.

GM paid its workers $73.26/hr.

Chrysler paid $75.86/hr.

Toyota, Honda and Nissan paid an average of $48/hr. 

American auto workers employed at American car companies cost much much more than the Americans working for Japanese car companies.

I wonder why that is. 

At least I know partially why Japanese car companies can come out in the black.

Making better cars doesn't hurt either.