That's true but the current administration will be the prior administration in two years so who knows what's going to happen by then. Also, even the most conservative, free-market, free-trade Republician sitting in the White House would have a very difficult time to saying "NO" to GM or Ford if it came to the point that the government entier provides a bail-out or they die.

My main point with my statement, however, was that Washington already has done what flowmotion was accusing Japan of being willing to do.

 

Talking about the US government and how US citizens get health care, not bailouts.

And what you're saying is wrong -- Nissan has no obligations to subsidize health care for any current or former employees (just like my company). That's not true of GM or Ford.

 

I'm not sure why you think that but you are incorrect - No company MUST or is obligated to provide or subsidize healthcare/healthcare insurance for employees, whether current or former, whether they are GM or any other company.

Likewise, no company is obligated to offer any sort of pension or retirement plan although there are rules they have to follow if they do offer a pension plan.

 

I would be interested to see just exactly what GM and Ford are paying for each employees plan on average. I still find it hard to believe that they are the ones having this problem on this level. Almost all companies offer health care plans through HMOs or something similar and its not like every company is hurting like GM and Ford. Once again I will have to cite bad management till I can be shown otherwise.

 

The problem isn't the active employees it is the retirees and their families, as I understand the problem. Also look at what GM has for retirees in the US vs say Toyota or even an older US company like say GE.

 

I realize they are blaming retirees mostly for the increases in cost. What i dont understand is why GM, Ford and Chrysler are the ones having major financial problems as a result of increasing healthcare costs. I dont see other major firms going to DC asking for help. There obviously is an issue but I am hesitant to point the finger only at healthcare costs. It seems that US auto firms are wishing to duck their retirement costs by pleading to DC.

 

If you look at all the retirement and healthcare insurance plans offered to retired workers of Toyota, Ford, Honda, GM, Nissan, and Chrysler you'll see very little/very minor differences.

There are several issues faced by Ford, GM and Chrysler.

1. One is that they have far more retired employees still alive and using the healthcare insurance than Honda, or Toyota or Nissan because Detroit's big 2.5 have been in business in the US for many decades longer than the 25 years or so that the transplants have been here.

2. Detroit agreed to their retirement health insurance plans with the UAW when they were on top or the automotive world...they thought they could afford their plans then but we now know they can't anymore.

You can hide a problem like this when you have two working employees for every retired one (can anyone say Social (in)Security) but once you have two retired employees for every working one, things start to look different. The problem is, they have very little options open to them becasue of the corner they've painted themselves into with the UAW.

3. Also, as most of us are aware, healthcare costs have been rising at a far greater rate than costs in general.

One of the problems I have with Detroit asking for help from Washington with regards to healthcare insurance is that they essentially want to find an easy way out of the mess theyv'e made for themselves...they could have seen this coming fourty years ago but they and the UAW were either stupid, blind or cowards and did nothing but keep agreeing to contracts that really couldn't be supported by the numbers.

Detroit likes to blame foreign competition for all their problems but if you look at the numbers, they are selling enough cars (because the overall market is constantly expanding) but their costs per car keeps going up and THAT would be heppening whetheror not there was any foreign competition; the import competition may have hastened the crisis but the crisis has been coming for decades.

 

GM is on the hook for their retirees because of their labor situation. You know this, you're just being tedious.

 

your forgeting union contract there bud. if they have a contract with a union requireing it then they have to obey that contract.

 

No…I'm not forgetting the contracts nor am I being tedious.

Contracts can be broken. In fact, they are routinely broken whenever one party to a contract decides that the cost of breaking the contract is less than the cost of performing to the contract.

The point I was trying to make is that there is a very big difference between something being mandatory (which gives the impression that there is a criminal penalty involved if not done) and someone (like GM) voluntarily entering into a civil contract (the UAW).

Put another way, as a matter of law, GM has no more or less requirements or responsibility to provide healthcare insurance to either its current employees or to its retirees than does Nissan or Toyota or any other large company.

I agree, the transplants won’t have to face strikes or lawsuits from the UAW if they make changes while GM, Ford and Chrysler would but that isn’t the fault of the transplants.