Car parts

Also in the Journal is a story about the “outsider” running Fiat and apparently doing well so far. Part of his cost-cutting approach has been to lay off managers rather than close factories. The story says this guy maintains that: “Labor is only 6% to 7% of the cost of making a car.”

Is that right? It surprised me. Certainly the impression I’ve gotten from the restructuring tactics of the big U.S. automakers has been that labor-related costs are a huge problem. It’d be interesting to see a breakdown of those costs. How much is materials? How much is R&D? How much is marketing? How much is executive/management-related?