Lack of National Health Care Helped Kill Delphi, is GM next?


Here is a recent Autoweek article detailing the issue:

http://www.autoweek.com/news.cms?newsId=102080


Even the CEO of GM publicly recognizes the gap in health care is a
problem. Here's the key number: $1,525 per vehicle


"GM says that its payments for retirees' health care - more than what
the company spent for steel - add about $1,525 to the cost of every
vehicle the company sells.

In contrast, Toyota must contribute to health insurance payments for
only about 64,500 active workers in Japan.

Toyota's health care costs are so negligible that they aren't even a
line item in the company's financial statements. Toyota benefits both
from the Japanese national health plan's coverage of retirees' medical
needs and from the way that plan is structured.

Health care is paid for through a combination of mandatory payroll
deductions from employees and employers. The cost is spread equally
among various employers. That means older companies with large numbers
of retirees are not at a disadvantage compared to companies with fewer
retirees.

GM argues that it pays for more than its own employees and retirees.
Indirectly, it pays for the approximately 45 million Americans who do
not have health insurance. That's because medical providers charge
higher fees to those who are covered by insurance to compensate for
those who are not covered.

Toyota does not pay extra taxes to fund the government health care
plan. Corporate income tax rates in Japan and the United States are
virtually identical at just below 42 percent.

Perhaps sensitive to comparisons, Toyota declined to say whether its
total health care spending in Japan amounted to more or less than $10
million a year.

The difference represents a huge competitive disadvantage for GM. Money
that must be spent on retirees' health care cannot be spent on
developing new models, upgrading factory equipment or hiring the most
sought-after designers.

The impact of the health care burden is particularly frustrating,
because over the past decade GM has made huge improvements in our
operational competitiveness," Wagoner says. "We have some of the most
productive plants in North America, including four of the top five, and
our quality has improved dramatically."

But then Wagoner loses his nerve and the article says this:

"Wagoner stops short of calling for a national health plan."

Time to wake up! Maybe we need to a new version of Charlie Wilson's
famous chestnut: "What's good for America is good for GM."

.

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