Originally posted by 18psi2300:
Originally posted by bigMoneyRacing:
Two things are killing the big three IMNSHO. #1 Years and years of poor product. #2 Legacy costs. Just google GM and legacy cost, its astounding. In 2003, GM had 2.53 retired workers for every worker on the job. Over $1000 of *every* vehicle sale goes straight to legacy costs. Thank you union!



I don't know if you've ever worked in a factory, but people retire out of there battered and broken. If a worker puts in 25 or 30 years of work, I'd say a company owes them a decent way of living when they're done. Humans are not disposable objects that you use for profit and then throw away when they're no longer of value to you.



Very true. But when you're making more than $31.50/hr (the average wage for a UAW worker in 2002) you also share some responsibility for saving for your own retirement. You shouldn't have to rely on GM paying you a substantial portion of what you need in perpetuity. Part of that exhorbitant sum of money from the company is so that you'll have a "decent way of living when they're done."

When the original pension agreements were written up with the UAW decades ago people didn't live as long as they do know. Companies are facing the same thing that Social Security is today -- People are living longer and far more people are retiring than working. GM has almost 500,000 retirees to pay but only a little more than 150,000 employees that actually earn it money. It never expected that to happen. And renegotiating the contracts to withhold more pay for pension plans, extend the retirement age, or decrease pension payouts is not an option; the unions aren't willing to budge. And even if it did it would only affect the current generation of workers, not the ones that are already retired. It wouldn't solve the problem. Of course bankruptcy wouldn't either -- it would declare all pension contracts null and void, leaving the workers with absolutely nothing. If GM lasts more than a few more years without declaring Chapter 11 I'd be surprised.

Only a federal bail-out of retirement and health-care costs is going to save Ford and GM. The Japanese have a much younger US workforce in the US and aren't yet shouldering huge retirement costs. And in Japan people take more personal responsibility for their own retirement and health-care is largely government-subsidized. As such, the added costs to Japanese vehicles are very small. GM is almost $3,000 per vehicle just to pay health-care and retirement costs that Japanese companies largely do not pay. It's an unfair competetive advantage that will soon balloon to being an impossible hurdle for the Big Three to clear with GM going first.

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