The only way to cut GM's health care costs are to cut loose the 406,000 retirees--and their dependents--who get health care via GM pension plans.
Of course I find it interesting that if I can't make the mortgage due to circumstances I didn't predict, too bad. I can't even discharge that during personal bankruptcy anymore, it's pay the whole freight or get out.
GM entered a set of contractual obligations, didn't predict a future where they could not meet those obligations, and now wants the taxpayers to bail them out, or they get to file Chapter 11 and cut the retirees loose. Taxpayers still pay because those retirees will need more government aid and cost of care write-offs which raise health care costs for everyone else.
All this would be moot if the US health care system were not employer-based, in which case the playing field would be level already, with a big fat 0 for both firms.
I'd also like to see how the $73.73 figure is calculated. The actual wage gap between the two is about 3 bucks an hour (same link) but the total labor cost gap is more than $25 an hour. Does that include healthcare (in which case it was counted twice). If not, that's awful high. Maybe pension obligations? That's way high. Using the quick 50% of wage cost--a common HR WAG when you don't have hard numbers--Toyota should be around $40, so they are high at $48, but GM should be around $46, and they're above $73.
GM also sells a lot of cars not because they're people's primary choice, but because prices for an equivalent car are lower, or the financing is better. Considering GM is losing money per car at this point, I hardly think those lower prices are GM's choice.
I also wonder about that $73 figure. It must include healthcare, which means it was double counted in the OP.
My dad is a retired GM employee (33 years), and I can tell you that his base pay was about $28/hr at the end. Granted, the cost of benefits were so high that they were scared to hire too many people, so he got tons of overtime.
In fact, he averaged over 60 hours a week (and often up to 85) the last 7 years he was there (1998-2005), so his annual pay looked pretty darn good with all that time-and-a-half. He accepted a buyout to retire, even though he wasn't really ready to, and as he was leaving they already had most of the plant converted to $14/hr non-union positions.
The days of the platinum health-care for retirees are pretty much over as well. My mom just spent a week at home sick because she didn't want to spend $175 to go to the doctor. When I was growing up we could go to the doctor/hospital for free on Dad's insurance, so this was a bit of a shock to me. Sadly it seems like my $55/mo high deductible plan beats their insurance in a lot of ways.
I'm not saying all this to try and earn sympathy for my parents or blame GM. I just want to point out that it's not all roses for the 'greedy union workers and retirees' either. There has been a lot of absurd crap over the years (like the job banks that paid people to sit in a room all day), but the absurdity goes both ways. My dad has stories about them building cars that had no buyers, just to honor supplier agreements, and then storing said cars in fields until they were scrapped.
Of course I find it interesting that if I can't make the mortgage due to circumstances I didn't predict, too bad. I can't even discharge that during personal bankruptcy anymore, it's pay the whole freight or get out.
GM entered a set of contractual obligations, didn't predict a future where they could not meet those obligations, and now wants the taxpayers to bail them out, or they get to file Chapter 11 and cut the retirees loose. Taxpayers still pay because those retirees will need more government aid and cost of care write-offs which raise health care costs for everyone else.
All this would be moot if the US health care system were not employer-based, in which case the playing field would be level already, with a big fat 0 for both firms.
I'd also like to see how the $73.73 figure is calculated. The actual wage gap between the two is about 3 bucks an hour (same link) but the total labor cost gap is more than $25 an hour. Does that include healthcare (in which case it was counted twice). If not, that's awful high. Maybe pension obligations? That's way high. Using the quick 50% of wage cost--a common HR WAG when you don't have hard numbers--Toyota should be around $40, so they are high at $48, but GM should be around $46, and they're above $73.
GM also sells a lot of cars not because they're people's primary choice, but because prices for an equivalent car are lower, or the financing is better. Considering GM is losing money per car at this point, I hardly think those lower prices are GM's choice.