--- In FairfieldLife@yahoogroups.com, gullible fool <[EMAIL PROTECTED]> wrote: > > > > http://www.tnr.com/politics/story.html?id=1026e955-541c-4aa6-bcf2- 56dfc3323682 > > > "Love will swallow you, eat you up completely, until there is no `you,' only love." > > - Amma >
******* >From the article: "Of course, the cost of benefits for those retirees--you may have heard people refer to them as "legacy costs"--do represent an extra cost burden that only the Big Three shoulder. And, yes, it makes it difficult for the Big Three to compete with foreign-owned automakers that don't have to pay the same costs. But don't forget why those costs are so high. While the transplants don't offer the same kind of benefits that the Big Three do, the main reason for their present cost advantage is that they just don't have many retirees. The first foreign-owned plants didn't start up here until the 1980s; many of the existing ones came well after that. As of a year ago, Toyota's entire U.S. operation had less than 1,000 retirees. Compare that to a company like General Motors, which has been around for more than a century and which supports literally hundreds of thousands of former workers and spouses. As you might expect, many of these have the sorts of advanced medical problems you expect from people to develop in old age. And, it should go without saying, those conditions cost a ton of money to treat." * The trouble with this analysis is that it does not mention foreign auto plants manufacturing in their own countries or in countries other than the U.S., and I don't see what sense it makes to merely point out that Toyota et al plants operating in the U.S. have fewer retirees, and that's why their labor costs are lower. What we need to know to know to determine whether Detroit costs are competitive in the worldwide auto market is whether Toyota or Mercedes etc employees working in their own countries or in countries other than the U.S. have wages/benefits that near what Detroit pays for labor. If cars can be made in Korea or in Vietnam or in Mexico for substantially less than they can be made for in Detroit, then obviously U.S. wages/benefits have to be adjusted or the industry is eventually doomed (and now that I think about it, my uncle's Cadillac was made in Mexico).
