No shite, Sherlock!: Rick Wagoner says not having $103B in health care costs would help GM immensely

[marmar]

from ThinkProgress:



GM CEO: Serious Health Care Reform ‘Undoubtedy Would Help Level The Playing Field’»

Testifying before the House Financial Services Committee today, General Motors CEO Rick Wagoner said that his company has spent over $103 billion over the last fifteen years on pensions and post-retirement health care benefits. “Obviously if we had the $103 billion and could use it for other things, it would enable us to be even farther ahead on technology or newer equipment in our plants or whatever,” Wagoner said.

Considering these enormous costs, Rep. Gwen Moore (D-WI) asked Wagoner whether he would support “a national health care program in order to stay viable.” Wagoner agrees that serious health care reform would “undoubtedly” help the Big Three stay competitive with foreign automakers:

GWEN MOORE (D-WI): Wouldn’t this have been a great time for GM to say, we need a national health care program in order to stay viable? You correctly identify the problem, that other markets — China, Latin America, Russia where GM does not have the burdens of those costs. Why did you stop short of saying that this kind of initiative would help our industry?

WAGONER: Well it undoubtedly would help level the playing field for the industry. … We’ve then tried to we have been very active in the health-care debate since here in Washington. … Our competitors do in most other countries have a significantly greater government role.

Watch it: http://thinkprogress.org/2008/12/05/gm-health-care-refo... /


Indeed, the United States’ broken health care system puts enormous burdens on all employers — and has both helped create the Big Three’s current financial troubles as well as fueled the overall economic downturn. Health care costs add $1,525 to the price tag of every GM car; the company spent $4.6 billion on health care in 2007, more than it paid for steel. Warren Buffet has called GM “a health and benefits company with an auto company attached.”

Enormous — and rapidly increasing — health care costs cripple the Big Three’s ability to stay competitive with foreign automakers. For instance, Toyota, which benefits from Japan’s universal health system, “paid $1,400 less per vehicle on health care” and makes $2,400 more per car than American manufacturers. In both Japan and Germany, the government, employers, and individuals all share in the responsibility of paying for health care, leaving American companies at a competitive disadvantage.

In fact, just yesterday Toyota cut the ribbon on a new plant in Ontario, Canada. Committee Chairman Barney Frank (D-MA) pointed out that the only cost difference between operating in the U.S. and Canada “has got to be entirely on health care.” Though GM had supported President Clinton’s health care reform efforts, Frank scolded the entire industry for remaining silent. “Among the mistakes the auto companies made was in 1993, when there was an effort by President Clinton to do something about health care, you didn’t help him,” Frank said.


http://thinkprogress.org/2008/12/05/gm-health-care-refo... /

[ogneopasno]

1. The UAW and the Big Three have been talking for quite some time about single-payer health care and

how it would help huge corporations like theirs. They've got to get their shit together -- in fact, they should have years ago -- to take this fight to Congress.

[question everything]

2. I think that Lee Iacoca said the same back in 1992 (nt)

[thunder rising]

3. One note, Lee Iacoca is a Tau Beta Pi engineer ... one of the best. Next, the big 3 only whine now

because it is in their best interest. Part of what I would find acceptable is the resignation in shame of the CEO's.

[wtmusic]

6. I would give Lee the $25B to take over GM

with the rest of them it's a waste of money.

[Nexus7]

4. Why didn't they pay for it way back when?

Social Security gets money every paycheck, and invests it in safe instruments. In this way, it sets money aside all the time to meet its future obligations, while meeting its current obligations. The much-lamented date of 2019, in fact, is when it'll have to dip into that money that is set aside.

This (easily-fixed) event was enough for the republico-busho-wackos to want to privatise Social Security.

Firstly, why didn't GM set the money aside as and when they committed to these future health care costs? Well, of course, so that they could call it 'profits' and make off like bandits with the loot disguised as bonuses, dividends, perks, marketing, whatever.

And then, notice how the solution now is not privatization (as suggested for Soc Sec), but nationalization, or at least, for the government (that's us, folks) to assume the costs and/or the risks of health care.

Socialize the risks, privatize the profits - that's always how it is with these people.

[madrchsod]

7. they could not set aside the increase of insurance/medical cost

medical cost increase has risen higher than productivity.wages,and retail price. it`s impossible to set aside future medical costs with out going bankrupt.

[Nexus7]

8. Medicare

Medicare is expected to be solvent until 2019; and with some (relatively minor) adjustments, is expected to be fine past that date.

The problem is not health care costs with the Big-3; the problem is management. None of the doofuses heading those companies would know what to do if they were put on an assembly line; and they wouldn't know a lathe from an axle. That is the problem.

[xchrom]

5. recommend

[ourbluenation]

9. no shit sherlock kick and rec. n/t

[RC]

10. How much of this 103 billion was "overhead" for the insurance companies?

How much cheaper would our health care be if we eliminated the meddling..., err, middle man, the insurance companies from our health care costs?

[burythehatchet]

11. 35%

[RC]

14. 35%? Then that equals $36,050,000,000

That by itself would give a pretty big chunk of the world good health care. Never mind the rest of it.

[Hannah Bell]

17. $103 billion over 15 years was for heath care & pensions, for their

entire workforce (global).

They have 266,000 global employees.

There are about 400,000 US retirees (more dying than being created, since GM's been reducing workforce here since the 80s.)

According to them, they have 1 million global employees, retirees & dependents.


You could pay each one 40K/year & kick in the 4.6 billion (2007 expense) for health care.

That makes 44.6 billion dollars.

That's 25% of their 2007 revenues (178 billion), or 25% labor cost.

They're scamming lying thieves.

[fudge stripe cookays]

12. Go Gwen!

I loved moving here from Texas to have her as my rep.

You go girl!

[ContinentalOp]

13. This is what I really dont get.

Wouldn't single payer health insurance be in the best interest of EVERY big business apart from the insurance industry?

[Hannah Bell]

15. What's he babbling about? Bullshit, bullshit, bullshit!

"In 2005 we entered into the 2005 UAW Health Care Settlement Agreement
which reduced health care coverage to individual UAW retirees.

To mitigate the effects of the reduced coverage, the 2005 UAW Health Care Settlement Agreement
also provided that we make contributions to a new independent VEBA. These contributions
constitute a defined benefit plan with a cap (Mitigation Plan).

Our obligation to make contributions to the Mitigation Plan is determined by a formula. Our obligations are limited to these contributions.

The 2005 UAW Health Care Settlement Agreement further provides that we do not guarantee the ability of the assets in the Mitigation Plan to mitigate retiree health care costs.

Furthermore, the Mitigation Plan is completely independent of us and is administered by an independent trust committee (the Committee) which does not include any of our representatives.

The Mitigation Plan is partially funded by our contributions of $1 billion in
2006, 2007 and a third contribution of $1 billion to be made in 2011. We shall
also make future contributions...that relate to profit sharing payments, increases in
the value of a notional number of shares of our Common Stock (collectively, the
Supplemental Contributions), as well as wage deferral payments and dividend
payments.

Amounts we contribute to the Mitigation Plan related to wage deferrals,
dividends or changes in the estimate of Supplemental Contributions are
recorded as an expense in the quarter that the hours are worked, the dividend
is declared, or the change in estimate occurs.

We recognize the expense for the wage deferrals as the future services are rendered, since the active-UAW represented-hourly-employees elected to forgo contractual wage increases and to
have those amounts contributed to the Mitigation Plan.

The net underfunded status of the Mitigation Plan is reflected in our consolidated
balance sheet..."

http://www.gm.com/corporate/investor_information/docs/f...

[Hannah Bell]

16. 1) "$103 billion" in 15 years is for "pensions and post-retirement health care benefits"

not just for health care.

2. By 2010, they will no longer have significant *any* significant health care costs for retirees, since they've off-loaded it onto the union.

So what's he babbling about?



GM's pain hits retirees

Automaker drops health coverage for ex-workers 65 and older, affecting hundreds in Baltimore


http://bulletin.aarp.org/states/md/articles/gms_pain_hi...

[kath]

18. Yes - very important to note that the figure includes PENSIONS - something that these fuckers are

always trying to weasel out of.

Also note that European companies pay pensions, and that European countries have strong worker protection laws that don't even exist here.

We need to bring back strong unions in this country, pronto.