Re: US auto industry to die?

[Seth Sandronsky <ssandron@xxxxxxxxxxx>]

The London ECONOMIST blames the predicted imminent demise of the U.S.-based
auto manufacturers on unions.

Economist.com/June 14, 2003

EDITORIALS

Extinction of the car giants

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Worse, retirement now brings its own peril, as every retiree adds to the car
companies' growing pension burden. GM already has a pension-fund shortfall
of $19 billion, as big as its market capitalisation. Add the health-care
liabilities of both employees and pensioners, plus the presence of the
United Auto Workers (UAW) union, and Detroit is at a huge competitive
disadvantage to its Japanese competitors, with their younger, non-unionised
workforces. GM, which has two-and-a-half pensioners for every employee,
reckons pensions and health-care benefits add $1,000 to the cost of each car
it makes. Cuts in the workforce make the burden still greater. In Detroit's
circumstances, in short, downsizing cannot deliver results.


Jim,

So to cut its labor costs GM management will now back a single-payer health
care system in the U.S.?

Seth Sandronsky

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