"General Motors is looking down the barrel of a $63 billion liability to cover retiree health benefits. GM spokesmen and Chief Financial Officer, John Devine, has said that the government should do more to relieve the healthcare costs from corporations like General Motors.
Given that $1,400 of ever car sold by GM goes to pay healthcare costs for 1.2 million employees, dependents, and retirees, we understand why GM is so concerned.
Last year, nearly $5 billion was paid in healthcare related expenses!
Lobbying the government to shoulder part of this expense is the wrong answer. GM must look at itself as principally responsible for the $63 billion mess.
Every three years, a new master contract was agreed upon between General Motors and the United Auto Workers. Often, these contract negotiations were difficult, fractious, and bitter. Strikes were common. Ultimately, a new contract was signed, but for better or worse, that contract is a binding agreement between GM and the UAW.
GM’s promise was to pay medical benefits to current workers and future retirees. Perhaps the long-term medical cost was a trade-off against higher wages, but regardless, a deal is a deal and GM is obligated to pay. "
posted on April 13, 2004 10:54:03 AM new
What do unions have to do with it ? Non-union automakers like Honda and Toyota offer the same value of health insurance benefits as union shops.
The only reason why the Japanese auto makers aren't having the same problem is because they have a much younger work force.
The issue is not whether it is a union shop or not, but whether working Americans will have health insurance or not.
