and closing plants in North America. It should save the company about $2.5 billion a year, just after the company announced a $1.1 billion dollar loss for the first quarter of 2005, it's worst since 1992.
In case you missed the math on that one, the company is on pace to lose $4.4 billion this year, and the reduction in workforce and plant closings will only save them $2.5 billion. Not good.
I haven't seen the Unions reactions yet, but I'm sure they will be annoyed. Can you blame them? I can -- but then I approach life with the view of freedom where no one has a right to a job, while the union leadership believes differently.
Buried in the story is the real reason for the job cuts -- $1,500 per worker health care expenses. Companies CANNOT afford to pay that much money for every worker for insurance! And no, before you liberals try to provide the answer, the answer is NOT to get government to cover health care!
Third-party payer systems do not work. When you have a system that costs the end user zero dollars, they will use the system, especially when a third party pays for their use of the system. It is wrong.
This is a major crisis in America that the media does not want to touch -- why should they? The formerly mainstream media (FMM) WANTS insurance to be too expensive for businesses -- so they can support a government-run socialist medicine system.
The proper solution? Get government out of the way. Remove all government regulations on insurance and let workers buy their own. If a company wants to provide it as a benefit, let them -- without any government conditions. It worked in the past, and socialized medicine has NOT worked everywhere it's tried.
No government agency should have anything to do with medical insurance -- at all. When they do, they destroy freedom and destroy businesses -- like they are doing to General Motors right now.
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your template a little screwy.
Posted by: Alyfireman at June 07, 2005 02:58 PM (gl5IQ)
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This is a great shame. I hate to see ANY company have to make such cuts in labor forces, especially when the answer involves firing Americans in preference of putting people in other nations to work. There HAS to be an answer than outsourcing. I see outsourcing as a form of capitalistic wealth re-distribution from the US economy to third world economies and I do not like it one bit.
It may be of interest to note that the CEO (G. Richard Wagoner Jr.) is being paid $4.66M per year, and the VP of Product Development (Rob't A. Lutz) is being paid 2.95M to lead a company to fail. I'm fairly certain this is just their base pay, not including any stock options and other incentives. I have to wonder what types of cuts they'll be making to their own employment bennies as a result of their failures to run a profitable public company.
As for government healthcare, you already know my position on it. Every American should have access to healthcare, and it should be provided by the governmentS - the governmentS of our individual states - not the Government (with a capital "G").
By the way, I have an interesting post today, and I gave you some more "linkie-luv". Blog ON, bro...
Posted by: Gun-Toting Liberal at June 07, 2005 03:05 PM (Er9BL)
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Their two top execs are paid over $7M per year to make the company work, btw. I wonder what types of cuts they'll be making to their own salary and benefits packages as a result of their failure to keep their public corp operating at a profit.
I see they've chosen wealth re-distribution as their immediate answer. Wealth re-distribution right out of the American economy and right into the economy of some 3rd World country (yep, outsourcing). I don't believe this is the right answer either, and in fact would vote to have those two clowns at the top fired for even going there.
Agree, or disagree, we both agree that this is a tragedy for these workers and yet, another blow to the American economy.
BTW - gave you some linkie-luv again today, you "Enterpriser" you :-)
Posted by: Gun-Toting Liberal at June 07, 2005 03:10 PM (Er9BL)
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I absolutely do not care how much money the top exec are making, nor is it any of my business. By even mentioning their salary, you are showing jealously and are attempting, basically, to make a claim to their wealth.
The shareholders gave them that money. It belongs to them. If the shareholders and the board don't like it, they will change it.
I don't like it, either, when Americans lose their job -- in this case, it is the government's fault they are losing jobs.
Posted by: Ogre at June 07, 2005 05:18 PM (YgrHs)
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You have some good points regarding health insurance costs. A lot of the government regulations need to be removed. Especially ones that dictate the covering of infertility.
However, if you really want to lower insurance costs. The government does need to do something about these malpractice lawsuits that end up awarding patients millions of dollars. Most of these doctors can barely afford malpractice insurance anymore, so they turn the cost around on the patients/insurance companies.
Posted by: Contagion at June 08, 2005 08:50 AM (Q5WxB)
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Yes, I'll agree with that part -- malpractice insurance IS driving doctors out of business -- especially birthing doctors. But in my mind, that's up to juries to fix. ( http://www.fija.org )
Posted by: Ogre at June 08, 2005 08:59 AM (/k+l4)
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That $1,500/vehicle health insurance costs covers both current and retire's. GM has a huge retiree base, all with health insurance. The big 3 has always had a generous retirement package, one of the reasons why a lot of people like working for them.
But the big 3 have cut out pensions for new hires and very limited benefits for new hires in retirement. They have cut salary retirees healthcare and have added monthly payments for salary folks still working.
Union retiree's are starting to pay a small amount each month, current union employees are starting to pay a co-pay for visits and a little more for prescriptions. Gee, wonder who it's better to be?
As for the "Foreign" car companies and healthcare/pension costs. They all have governement supported healthcare, so costs are none to mimimal that they are paying. They also have government pensions, so they are paying again, none to minimal when the people retire.
As for "Foreign" car companies in the US, all their plants are relatively new so there retirement base is very small which means their healthcare/pension benefit payout is very small too. Plus they don't offer as good of benefits in retirement as the American car companies do.
Looking at it from a different perspective is that Toyota is on the same track as GM was when they were becoming #1. History and research has said in 10-15 years Toyota will be in GM shoes and GM will be in Toyota's shoes.
In the future Toyota and Honda will be big and bloated from building all these plants while the big 3 will be running lean with only the plants they need.
Posted by: Machelle at June 08, 2005 09:16 AM (ZAyoW)
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Your conclusions are certainly verifiably true -- I remember studying decades of the auto industry years ago -- it was defined as the classic cyclical industry -- it has ups and downs and always will!
Posted by: Ogre at June 08, 2005 10:00 AM (/k+l4)
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I work for GM, so I can add my .02 dollars on this...
The biggest problem with GM is that we don't look forward enough. Anyone with sense could have seen that the suv market would be gone the day gas prices went up. But they've really stalled on making pretty cars, and they've stalled on hybrid technology.
Yes, bennies are a problem. Pension is a problem. None of them would be as big a problem if GM had planned better.
(*)>
p.s. I'm not a big fan of the new template. Very hard to navigate. In case you're looking for opinion. You're probably not, though. So, carry on.
Posted by: birdwoman at June 09, 2005 09:26 AM (vR7Sl)
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Yes, planning can be blamed for part of it -- but then again, 10 years ago, who would have planned for 15-50% annual increases in health insurance costs?
And yes, I do want opinions on the new template. Thank you for yours. Many people don't like it, and I'm already working on it's replacement.
Posted by: Ogre at June 09, 2005 09:57 AM (/k+l4)
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