Every car the Big 3 make carries "legacy costs"—the costs of providing healthcare and pensions to scores of retired workers. For every Big 3 auto worker, there are about 10 dependants, which are defined as retired workers and their families.
According to David Cole, Chairman of the Center for Automotive Research, "when the international car companies came to the U.S., the move stuck the domestics with a very large disadvantage related to legacy costs. And that's $2000 a car." That two grand must be built into the sticker price of any new car and truck. And that's money on top of developing, producing and marketing a car—costs that Honda, Toyota and others don't have. It makes competing difficult for the domestic automakers, "like playing basketball with a bowling ball," according to Cole. GM's per-hour labor rate for car assembly is about $75 per hour, compared to $40 to $45 for other car companies. That particular disadvantage, says Cole, will be "gone by the end of next year," when a new labor agreement goes into effect.
The gig is up. It's time for the UAW to stop living in retirement fantasyland and join the real world with the rest of us.
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2 comments:
Just like most of your posts, this one is completely false. The Center for Automotive Research is funded by the Republican Party and therefore the cost estimates by Cole are completely inaccurate. My grandmother worked for GM for 20 years and now that she is retired, she has to live on her her pension of $50,000 per year plus her Social Security. And, has to pay 10% of her healthcase costs which in some cases the government won't pay. What is she supposed to do if the GM were to stop paying her? I guess the conservatives would like to just throw her out on the street and let her starve??
Crazy, your alias says it all!! At least admit that it is time for the UAW and it's retired workers to realize that the money tree in the back yard is dying if not already dead and therefore something has to change.
In regards to your ficticious grandmother, do you think that my granmother, who is on a fixed income, should have to pay higher taxes so that your grandmother can continue to live under the false impression that she deserves to continue to get paid?
Us Conservatives don't want anyone to starve we just want a level playing field. And, in some respects want to follow the communist creed of "from each accoring to their ability and to each according to their needs". Does your grandmother really need $50K per year plus Social Security plus what sounds like a 90% paid healthcare plan? I think not. It is way beyond what she needs and what beyond what my grandmother and the rest of us should have to pay for.
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