GM Strike May Hold The Future Of American Health Care

Indiana NewsCenter is reporting the local General Motors plant went on strike today over job security issues. One has to ask is this the real reason that the United Auto Workers and GM have reached an impasse? The real issue maybe the cost of runaway health care.

Health care costs are out of control in this country. While who is the blame can be debated, the issue of cost run up cannot be.

Companies are being forced to cancel employees health care insurance, move their companies out of the United States or close. It is no longer a threat, but a fact happening every day here in the great Untied States.

Anyone who can say General Motors, Ford, and Chrysler can continue to provide the same level of health care to current and retired employees is just missing a fact of life. Companies and powerful unions have to figure it out, as they will lead to what happens most other Americans.

The three AMERICAN auto builders can no longer compete with JAPANESE builders in sale price of their cars. Toyota and Honda build many of their cars sold in the United States right here in the USA. The JAPANESE plant are nonunion but only a few dollars an hour difference in actual hourly pay earned. The biggest differences is in fringe benefits, which includes health care costs.

Today the UAW has more then five times as many people retired as working in the auto plants. A little over 85,000 working UAW members must produce enough additional income for the health insurance coverage of 432,000 retirees. Currently the three automakers, as a fringe benefit, provide one of the best health care packages to all retired union employees.

In round numbers the big three are paying the working UAW workers a little over $25.00 an hour to just cover health care for the workers and retirees. This alone nearly removes the American automakers from competing price wise with any other car manufacturer in the world.

The other day I was talking to a friend and learned he had been laid off. Part of the reason he believes he was laid off is the business became aware of the fact his wife was on one medicine that costs over $90,000 a year. She is required to take one pill a day to try to keep her healthy. The company supposedly also knew that when the medicine no longer worked that her last chance at life would be a Bone Marrow Transplant. Her chances of even surviving the transplant procedure is less then 50% and cost around $150,000 - $200,000.

This friend has mixed emotions about being laid off. The company was an average size local company that provided health care to the employees. The employees contributed, from what he told me, about $50.00 a week for health care. He knew that the health care rate for the 30-40 some employees would go through the roof under current methods of setting health care rates. So, he feels bad for the former coworkers as they had their rates already jacked up, even though his family was no longer on the company policy.

The rest of his story is for some other time and it is not a pretty picture of what goes on in our country. It is real, and very saddening.

So what do the three American auto manufactures do to stay in business? While there is some places that they could cut costs within their operations there is nothing close to offset this health care financial drain. If there is, I am sure they would love to hear it.

The UAW has every right and the responsibility to seek the best contract for both their current workers and retirees. Nevertheless, there comes the time when everyone has to be honest. Just like in death, there is a time you have to let go. The UAW and the automakers must be honest with each other and reach a true compromise.

If the American automakers and the UAW cannot figure out the health care mess then the results will be ugly. First, the automakers will be forced consider bankruptcy to unload the union contract. Second, some of the auto manufacturing process will be forced to move off shore resulting in even fewer jobs for the UAW. Third, entire manufacturing lines will be moved off shore with only a small percentage of present UAW work force having a job.

The UAW members have to understand that we may not like the global economic issues today but they are out of our hands. The automakers also have to be keen on not trying to take too much away from the UAW. If a long strike results General Motors, Ford, Chrysler, UAW, and millions of other workers in the United States will loose. There will be economic carnage of such size the United States of America may never recover form.

The hope is the automakers and the UAW can deal in a manner that serves both well for the long run. While one may win this battle they both could end up loosing the war.