Monday, October 17, 2005

Retirees Victim of GM Stupidity?

In September, reports stated that US automakers were bracing for an autumn chill. Experts predicted dismal sales for the Big Three Automakers, amongst them GM. As gas prices rose, big SUV popularity dropped. No surprise! Who in their right mind wanted a "gas guzzler" with gas prices reaching $3.00 or more per gallon? GM was pressuring the United Auto Workers Union to lower health care costs, and Ford Motor was restructuring in a way that would close plants and cut jobs. However, the reality is auto sales are actually healthy overall. Several analysts predict 2005 sales will be around 17 million vehicles, unchanged or up slightly from 2004. Translation: company execs would continue to receive their share. But the problem? Asian car manufacturers, which didn't offer employee discounts this summer, haven't seen the kinds of ups and downs that are plaguing GM and Ford. Their U.S. market share could climb nearly 10 percent in September to 43 percent. And today, GM announced a tentative agreement with the United Auto Workers that will help the embattled automaker lower its health care costs even as GM reported a whopping $1.6 billion loss for the third quarter. The tentative agreement on health care is projected to reduce GM's retiree health care liabilities by about 25 percent, or $15 billion, and cut its annual employee health care expense by about $3 billion, CEO and Chairman Rick Wagoner said. Cash savings are estimated to be about $1 billion a year. Bottom line: retirees suffer in order to make sure GM can keep its profits up!
How unfare is this? Workers who gave years of their life to GM are now losing health benefits because GM couldn't make the profits it wanted. And part of the reason GM could not make those profits was stupidity! Keep making huge SUVs that eat gas like a linebacker at a buffet. GM, and other US car manufacturers had the opportunity to make smaller, more fuel efficient vehicles but chose not to do so. US car makers chose not to build hybrid vehicles, while foreign manufacturers did. Back in the 1970's, when the US faced a major gas shortage, US car manufacturers saw the need for fuel efficient cars. But, due to greed, both on the part of the car companies and US consumers, large gas-guzzling vehicles were once again in high demand. Now, it's again the "little guy" who suffers. It's the retirees, who have no choice or fight in the matter of their health benefits being cut, that have to suffer.
The US car manufacturers are just morons. Not only is the quality of US cars for the most part less than safisfactory, the choice of vehicles made is just as unsatifactory. It's no wonder foreign cars are so popular in the US.


Merci said...

This trend should frighten everybody, since we will all have to stop working someday. A pension plan and SS can look adequate until you have to start paying medical bills.

I understand that Starbucks gives health ins. to its part-timers. I can see myself in my new career as a barista at age 75!

Blue Cross of California said...

It's unfortunate to hear of how GM treats there employees. I hope something can be done to help improve situations for many as they lost health coverage.