Problems With Health Care Costs for Big Three Automakers Indicate Need for Universal Health Insurance System, Editorial Says
In an editorial about U.S. automakers' "woes" in competing with foreign automakers, the New York Times writes that problems with health care costs for General Motors, Ford Motor and Chrysler Group "underscore the need for a government-backed system of universal health care." According to the editorial, GM last week offered a second round of buyout or early retirement packages for United Auto Workers employees as part of an effort to reduce health care and labor costs, and Chrysler and Ford have offered similar packages.
Under the contracts signed last year with UAW, the automakers "agreed to put up billions in cash and other assets for trusts that would pay for retirees' health care, taking those costs off their own books," and the "union allowed the companies to hire cheaper noncore workers," the editorial states. The contracts allow the automakers to "hire new entry-level workers at much lower wages and with smaller benefit packages than current employees," which "would reduce their labor costs significantly," according to the editorial. The editorial notes that a government-backed system "would relieve some of the costs that have made competing [with foreign automakers] so much harder" (New York Times, 2/16).
