Gm
GM CEO G. Richard Wagoner, Jr. estimated in 2004 that every GM vehicle
built in North America included $1,400 in health care costs — typically more than
the value of the steel in the same vehicle.90 In February 2005, he raised this estimate
to $1,525.91 According to the Detroit Free Press, “GM ... has estimated its future
retiree health care obligation is $67.54 billion, but has set aside less than $10 billion
for that obligation. GM provides health care to about 1.1 million people, more than
any other corporation in the country.”92 With ageing labor forces and retirees now
outnumbering active employees, Ford and Chrysler face similar pressures.93 The
Automotive Trade Policy Council (ATPC), the joint representative organization in
Washington of the Big Three, estimated in 2004 that the overall Big Three average
health care costs per vehicle are $1,220, compared to an average of $450 estimated
for Japanese and other foreign-owned manufacturers. The total Big Three health care
bill in 2003 was $10 billion, compared to an estimated $1.6 billion for their
competitors, ATPC said. In terms of retirees and surviving spouses supported by
pension benefits, ATPC estimated that the Big Three support more than 800,000
persons, compared to less than 1,000 now supported by foreign-owned competitors
operating in the United States — though that latter number is bound to grow over
time, while the Big Three number should peak in the next few years, and then
decline.94
More recent data in an Automotive News article gave even higher estimates and
greater discrepancies, based on 2004 data. It stated that GM paid for the health care
of 339,000 retirees, accounting for more than two-thirds of GM’s $5.2 billion
spending on health care (and not counting a $9 billion contribution to a trust fund for
health care costs). Ford spent $2...
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