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General Motors continue to perpetuate the myth that benefits cost for employees are the reason for the company's precarious financial position.  Tonight on '60 Minutes", the GM propoganda machine continued the lie, saying that $1,400 of the cost of every new car is caused by "benefits paid to employees".  A gullible public, led by the unbelievably gullible mainstream media, simply accept the lie at face value without looking further.

GM's foreign competitors, we are told, "don't have to pay the cost of health care" for their employees because such plans are "covered by the government".  The GM propoganda machine would have you believe, then, that health care for Japanese auto workers is free.  And that's a bald faced lie.

Read the facts below the fold.

In fact, Japanese workers -- and by extension, Japanese companies -- do pay for health care.  It is assessed on workers out of their wages.  And Japanese workers pay 30% of the cost of doctor visits.  So, while its true GM pays a health care premium for its workers' health insurance, Japanes companies pay the same health care premium in the form of wages.  Moreover, Japanese workers pay a higher percentage of their income as taxes than American workers, a cost that Japanese companies pay by paying their workers a higher wage so that they make a decent "take home" pay of gross wages less taxes.  (Think about your own job:  would you do it if your wages equaled your take home pay and taxes were imposed on that amount?  Probably not.)

(Here's the link on Japanese health costs to workers.  I don't know how to work the new Autom format.  I'd appreciate help.):

The GM executive class is licking their chops in the great homes of Grosse Point at the prospect of being able to perpetuate this great lie upon its workers, the UAW, and the American public at large.  In truth, they want workers to concede hard-fought benefits so that they can reduce the cost of labor in the United States without having to incur the expense of moving whole plants to Mexico.

Sorry, GM.  The jig is up.  We're not buying the lie.

Originally posted to Thinking Republican on Sun Apr 02, 2006 at 07:30 PM PDT.


Is it time for Congress to investigate GM's claims about benefits costs?

69%25 votes
13%5 votes
11%4 votes
5%2 votes

| 36 votes | Vote | Results

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Comment Preferences

  •  And Where is the UAW leadership? (2+ / 1-)
    Recommended by:
    tlh lib, rjo
    Hidden by:
    Bill Rehm

    If the UAW fatcats in Washington would push away from their table at The Palm, maybe we could find out how much of the cost of a Japanese car is consumed by benefits costs.

    "The beginning of thought is in disagreement -- not only with others but also with ourselves." - Eric Hoffer

    by Thinking Republican on Sun Apr 02, 2006 at 07:31:08 PM PDT

  •  If you vote 'for other reasons', state the reason (0+ / 0-)

    "The beginning of thought is in disagreement -- not only with others but also with ourselves." - Eric Hoffer

    by Thinking Republican on Sun Apr 02, 2006 at 07:45:17 PM PDT

  •  But the Japanese are cheaters (2+ / 0-)
    Recommended by:
    davybaby, George in TX

    The cheat the system by making cars that people want to buy.
    It's time to level the playing field.

  •  I've heard this before, although (0+ / 0-)

    I didn't watch the show tonight.  They might have somewhat of a point or backing for their healthcare points.  If they happen to pay for healthcare for their retirees, we do have an older workforce in some companies like GM, than do the Japanese.  The car industry is older here than there, and at some point they will be facing retirees and some of the same circumstances that they do in the US.  Even if they do not have retiree healthcare, my guess is that there is not a lot of turnover there, and therefore their workforce is older in the US, too.

    These are just my ideas that I have also heard as arguments often in the past.  It makes sense to me, although it might not cost that much per car.

  •  Why move? Why pretend? Why worry? (2+ / 0-)
    Recommended by:
    dkmich, Gegner

    In truth, they want workers to concede hard-fought benefits so that they can reduce the cost of labor in the United States without having to incur the expense of moving whole plants to Mexico.

    Corporate America has its cheap slave labor moving north, let GM fire all the union labor and hire the slaves.

    Move/stay/whatever, it comes down to this, there will be a day when someone takes a rock and smashes a GM product really hard. Then another destitute un-employed American will squirt a little lighter fluid on a GM product and then, a match.

    Insurgents are not born, they are created.

    Ahhh, the skeptic will say, "Yeah, but the insurance company will pay GM for the damage and the trouble maker will be arrested."

    I agree. You are correct Mr. Skeptic. Now introduce time, mix in the unholy number of un-employed workers and re-peat the scenario thousands, millions of times. How may claims will the greedy insurance companies pay? Not too many.

    We workers own the right to be called Americans. But the price has to be paid daily.

    GM exists by our labor, our consumption and most of all by our invitation.

    If the Congress of the United States of America won't do its job, then I submit we the people will have to do it for them.

    One GM at a time....

  •  Not Totally True (3+ / 0-)
    Recommended by:
    alizard, dkmich, libnewsie

    I haven't seen recent studies but in the early 1990s there was some pretty comprehensive analysis that showed US companies paid substantially more for health care benefits than their Japanese and European competitors.  That is mainly due to the inefficiencies in our health system.  I don't think much in the past decade has changed to narrow the gap.

    The elephant in the room is that GM is where it is because they build cars no one wants to buy.  Lots of other employers pay similar percentages of the revenue on health care but because they can sell their products it is not a major issue.  Since GM can't, the benefits they have agreed to are unsustainable.  

    •  I'd be curious to see that analysis. (0+ / 0-)

      My guess is that they simply took things labeled "benefits" and ran that tally without including the cost of wages that are required to be paid by workers to the Japanese health system by law.

      "The beginning of thought is in disagreement -- not only with others but also with ourselves." - Eric Hoffer

      by Thinking Republican on Sun Apr 02, 2006 at 08:06:23 PM PDT

      [ Parent ]

      •  Not Sure Where You Are Going Here (0+ / 0-)

        One of the think tanks did the analysis during the Clinton health effort - it may have been Brookings.  I can look into it.

        The real question is what percentage of fixed costs go to health care.  In the US this can be measured by health insurance premiums paid and in Canada and most other countries it is measure in taxes.  On a per capita basis, the US spends over $5000 per person per year on health care which is substantially above our competitors.

        GM spends about $5 billion per year in health care for current workers and retirees.  They probably took that number and divided by cars produced which is legitimate.  

        The UAW, which manages most of this benefit through its welfare funds, has not disputed the number which leads me to believe it is in the ballpark.  THe UAW argues, correctly, that the GM signed a contract and promised the benefits.  

        Healthcare costs are a competitive problem and we need to get them under control.  However, the real issue remains that GM doesn't make cars people want.  That is why they are having financial problems and can't pay the promised benefits.

    •  They just can't compete (0+ / 0-)

      Sad really, but they have never faced competition like this since they started.

      And it's all the management, they made the stupid moves to put them in the sad state they are in.

      Over the last 5 years, I've seen people who would never ever buy foriegn car, buy a Toyota or a Honda.

    •  Very true, and evidenced by 60 mins (0+ / 0-)

      in tonight's segment, they were showing GM's latest creations. They were, every one, some monstrosity like a cadillac, a sports car, or "the new camaro."

      For fuck's sake, GM, gas has been over 2 bucks a gallon for what, 3 years now? And it's approaching 3 bucks now! War with Iran is going to put gas at 10 bucks per, guaranteed.


      Where were the hybrids??? Not a one in sight, when GM had one hell of a chance to showcase them with this opportunity.

      It's no surprise at all that they're in trouble, at least to me.

      I am become Dubya, Destroyer of Words...

      by Swampfoot on Sun Apr 02, 2006 at 08:38:26 PM PDT

      [ Parent ]

  •  no, for other reasons. why? (0+ / 0-)
    well, this is a helpful diary insight. and i agree with the general sentiment that GM willing to renege its obligations, especially historic agreements, with US labor is absurd. GM is a global business. its operations, products, and operating expenses -- or transaction costs -- vary country to country. US being socially retarded as it is, all the other 'host' countries most certainly impose higher direct and indirect taxes on its business.

    i haven't looked at '05 annual report yet; but GM EBITDA (earnings before interest, tax, deprec & amort) '05 was $3.9B on $192B gross revenue. net was $ -10B: they paid a bunch in dividends and interest (probable because of forex, hedge, and cap gains), unsold inventory (heh), but not taxes.

    you're right. sorta. payout on benefits doesn't figure prominently in the income sheet. its drag on the balance sheet might concern some anal investors -- because, well, management has alota different issues that drag on the stock.

    however, you compare GM to japanese manufacturer costs, in general, to refute the GMs claim that it is at a competitive disadvantage because of (short/long term) benefit liabilities in the US. this may or may not be true, but your poll asks if a congressional investigation of its 'claim' is warranted.

    no, it's not. unless the day comes GM seeks fed bankruptcy protections in the order of airline industry subsidies. this type of direct corporate 'welfare' would be funded by tax dollars. then GMs management, labor relations, and globalrevenue would be everybody's business.

    Diversity is the key to economic and political evolution.

    by MarketTrustee on Sun Apr 02, 2006 at 08:07:41 PM PDT

    •  If they file bankruptcy then the taxpayer's will (0+ / 0-)

      be on the hook for all of their pension costs under the Pension Benefit Guarantee Corporation (kind of like the FDIC.)

      It will make the savings and loan crisis of the '80's look like you bounced a check at the grocery store.

      But Congress will never investigate.  GM's got plenty of guys on Gucci Gulch (K Street in Washington) to spread money around to stop any member of congress to start turning over some rocks and kicking tires in the GM executive suite.

      "The beginning of thought is in disagreement -- not only with others but also with ourselves." - Eric Hoffer

      by Thinking Republican on Sun Apr 02, 2006 at 08:18:02 PM PDT

      [ Parent ]

  •  mmm I can't wait to buy me a huge 'car!' (0+ / 0-)

    Maybe if they (and the other US manufacturers) would spend a little more time making cars appropriate and efficient and a little less making them oversized...

  •  That day will come in the next 3 years (0+ / 0-)

    I read a quote from their CEO today that they are planning on bringing loads of more SUV's to the market.
    But you are right it shouldn't be done till then, sadly.

  •  GM & PanAm (0+ / 0-)

    GM today reminds me of PanAm in the 1980s. As PanAm got itself into financial trouble, it sold off the PanAm Building on Park Avenue in New York (now the MetLife Building, it sold Intercontinental Hotels, and it sold its Pacific routes to United, all in a futile effort to save the core business. In retrospect, it sold the good parts and kept the bad.

    Now, GM has apparently embarked on the same course. Instead of trying to sell GMAC, it should keep GMAC and get out of the manufacturing business. But they don't have that much sense. GM will go tits-up within two years.

  •  Japanese manufacturers in the US (0+ / 0-)

    A good percentage of "Japanese" cars are built in the US.  In fact our Toyota Corolla was built in California in a plant that is jointly owned by GM.  Shouldn't those Japanese companies have the same health care costs per car as GM for the US-built cars?  If it was so uncompetitive for the Japanese (and Koreans and Germans...) to build cars in the US you know they they would have never built plants here.

    •  Not quite the same (0+ / 0-)

      Not quite the same as the Japanese car makers pay their American employees less and provide fewer benefits.  They also like to build plants in the south although not exclusively to take advantage of the anti-union astmosphere and lower wage expectations there.  The Japanese plants in America also don't have the same number of retirees drawing pensions and benefits that GM does.  

  •  Ooooh, (0+ / 0-)

    As opposed to 100% or 90%?  If Janpanese workers get laid off, do they continue to receive wages?  How long, how much?  Have you any clue what benefits GM workers really get?  Are you UAW?  You are comparing apples and oranges.

    Patriot Party 08: Feingold, Murtha, Boxer, Harkin, Conyers, Kucinich, Sanders & Dean.

    by dkmich on Mon Apr 03, 2006 at 02:17:06 AM PDT

  •  GM is following the Bush business plan... (0+ / 0-)

    load up massive future financial obligations, and when the house of cards colapses, leave the working class to fend for themselves.

    Any investigation of GM by our (current) Congress would be like a meeting of kindred spirits.   Pointless.  

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