Big Three Automakers Should Not Receive U.S. Help On Health Care Costs, Editorial States

Main Category: Health Insurance / Medical Insurance
Article Date: 20 Nov 2006 - 22:00 PDT

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General Motors, Ford and the Chrysler Group, the CEOs of which met with President Bush on Wednesday to discuss the future of the U.S. automobile industry amid concerns about health care costs and trade issues, "are keen to present their current woes as industrywide," but the Big Three do not "speak for the industry" and are "responding to self-inflicted wounds," a Wall Street Journal editorial states. According to the editorial, evidence "suggests that the U.S. auto industry as a whole is healthy and that the troubles of GM, Ford and Chrysler are by and large unique to those Detroit players," which, among other issues, have high costs for health and other benefits for employees and retirees because of agreements with the United Auto Workers. "These legacy costs, which don't burden foreign competitors, are gobbling up cash at the Big Three and explain their eagerness to seek political benediction," the editorial states, adding that, with Sen. Carl Levin (D-Mich.) and Rep. John Dingell (D-Mich.) likely to take leadership positions in the new Congress, "there's likely to be increased pressure for some kind of government aid" that "will involve some taxpayer assumption of legacy costs." However, such help would "retard the necessary if painful transformation that is currently taking place at the Big Three" and would "reward bad management decisions -- and union intransigence -- by allowing care companies to toss health care costs over to taxpayers," the editorial states (Wall Street Journal, 11/16).

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