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Dan Neil, MA, automotive columnist for the Los Angeles Times, stated the following in a Dec. 2, 2008 Los Angeles Times article titled "Buy GM, Really":
"Considering that the domestic carmakers are shouldering titanic 'legacy' costs - it's estimated that $2,000 in healthcare, pension and employee post-retirement benefits are baked into the price of every EAW-built vehicle - just being competitive in any segment is a signal achievement."
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The United Auto Workers Union (UAW), a labor union that represents skilled trades and production workers at General Motors, Ford and DaimlerChrysler, stated the following in a Dec. 2, 2008 article titled "The Truth About UAW Members and the US Auto Industry," posted on its website:
"The main reason that Chrysler, Ford and GM have higher legacy costs than the foreign nameplate operations in the United States is not because their retiree benefits are much higher. It's because they have so many more retirees. Because the domestic auto companies have been operating in this country for many years, they have large numbers of retirees. But the foreign nameplate operations only started operating in this country 25 years ago, and therefore have very few retirees.
In addition, the overwhelming majority of retirees from Toyota, Nissan, Honda, BMW and Mercedes live in countries where national health care systems spread the costs of providing health care across the entire societies. The real solution to the high health care costs which burden all American employers - not just automakers - is the enactment of national health care reform."
Dec. 2, 2008 - UAW  |
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Jon Kyl, LLB, US Senator (R-AZ), was quoted as having said the following in his Nov. 24, 2008 press release titled "Auto Industry: Removing the Weight" and posted on his Senate website:
"Ford, General Motors, and Chrysler - commonly known as the 'Big Three' automakers - are riddled with structural deficiencies and weighed down by tremendous 'legacy costs,' the financial burdens resulting from agreements with labor unions, obligations from previous contracts, and state laws restricting them from dropping local dealer franchises.
Even when these companies design cars that can compete with cars made by foreign-owned companies, these legacy costs make it impossible to turn a profit. For example, the hourly cost of labor for the three domestic auto companies averaged $73 in 2007. In comparison, the average for the Japanese auto companies operating in the US was $48. The vast majority of the difference can be attributed to benefits, since US employees at foreign car companies earn comparable wages. Health benefits, for example, add $1,900 to the cost of every Ford, GM, or Chrysler car."
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