"...If business and labor had joined together in 1970 in the fight for health
insurance, unionized and non-union auto companies would now be on a level
playing field, and GM would not be at such a financial disadvantage
against producers like Toyota because of retiree health care costs. GM
knows that well: It has praised the cost savings from Canada's
single-payer health insurance system, but it has not used its clout to
push for such a system in the United States.
And the UAW would not be setting up a VEBA -- Voluntary Employee
Beneficiary Association, essentially a union-administered trust fund -- to
provide retiree health care. The VEBA will allow GM to pay roughly a third
less than its currently projected costs for employee health insurance. And
retirees will face the risk -- quite high given current health cost
inflation -- that the VEBA will not have enough money to continue to pay
their health insurance costs. A VEBA at the manufacturing company
Caterpillar, for example, went bust in a decade, and some retirees have
gone from paying minimal health costs to $1,000 a month.
Health care costs are not the only cause of GM's problems or the
insecurity of their employees' jobs. After all, labor costs represent only
about 10 percent of the cost of a car. There are vastly fewer GM jobs now
than in 1970 because GM's share of the market has been cut in half,
because productivity has increased dramatically, and because GM has
increasingly outsourced and offshored jobs.
GM would be in a far stronger position if it had listened long ago to the
union, in particular former president Walter Reuther. Back in 1956, before
the import onslaught, Reuther gave a prescient speech in which he argued
American auto companies should build a small, non-polluting,
fuel-efficient car. Unfortunately, even though the UAW still promotes a
single-payer national health insurance plan, in recent decades it has
largely sided with the auto companies in fighting stricter fuel efficiency
standards that ultimately would have put GM in a stronger position today..."
insurance, unionized and non-union auto companies would now be on a level
playing field, and GM would not be at such a financial disadvantage
against producers like Toyota because of retiree health care costs. GM
knows that well: It has praised the cost savings from Canada's
single-payer health insurance system, but it has not used its clout to
push for such a system in the United States.
And the UAW would not be setting up a VEBA -- Voluntary Employee
Beneficiary Association, essentially a union-administered trust fund -- to
provide retiree health care. The VEBA will allow GM to pay roughly a third
less than its currently projected costs for employee health insurance. And
retirees will face the risk -- quite high given current health cost
inflation -- that the VEBA will not have enough money to continue to pay
their health insurance costs. A VEBA at the manufacturing company
Caterpillar, for example, went bust in a decade, and some retirees have
gone from paying minimal health costs to $1,000 a month.
Health care costs are not the only cause of GM's problems or the
insecurity of their employees' jobs. After all, labor costs represent only
about 10 percent of the cost of a car. There are vastly fewer GM jobs now
than in 1970 because GM's share of the market has been cut in half,
because productivity has increased dramatically, and because GM has
increasingly outsourced and offshored jobs.
GM would be in a far stronger position if it had listened long ago to the
union, in particular former president Walter Reuther. Back in 1956, before
the import onslaught, Reuther gave a prescient speech in which he argued
American auto companies should build a small, non-polluting,
fuel-efficient car. Unfortunately, even though the UAW still promotes a
single-payer national health insurance plan, in recent decades it has
largely sided with the auto companies in fighting stricter fuel efficiency
standards that ultimately would have put GM in a stronger position today..."
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