Back in the 1950s, Charles Wilson, then GM’s president, declared, “What’s good for General Motors is good for America.”
Reeking with more arrogance than corporate benevolence, the quote certainly doesn’t apply anymore, if it ever did. With most of GM’s production, profit and workforce coming from overseas, maybe we ought to update Wilson’s quote to say, “What’s good for America is good for General Motors, at least the part that’s still American.”
According to GM, the American part is losing money hand over fist, $39 million in the second quarter of 2007 alone. Meanwhile, the global part of GM is making money fist over hand, $227 million during the same quarter in Asia and $213 million in Latin America, Africa and the Middle East.
No surprises there, right?
What’s remarkable, though, is that GM raked in $217 million worth of profits in Europe, where wages are the highest in the world, vacation time is four to five weeks, taxes are higher to pay for benefits like government-paid family and medical leave, unions are stronger, business practices are more rigidly regulated and a shorter workweek is the norm.
By all rights, GM should be fleeing Europe quicker than it is leaving Flint, Mich., its original home. But why leave when you can make Third World profits in a First World region?
But the question has to be asked: If GM can do so well in “socialistic Europe,” why can’t it do just as well here in the United States?
Simple answer: It can.
The one big difference between GM making a profit in the United States and continuing to lose money is that $30 labor cost differential between GM (as well as Ford and Chrysler) and Toyota. Since non-unionized Toyota workers in the U.S. are already making higher wages, including bonuses, than GM workers, the big difference is not that — it’s health care costs.
Toyota pays out a mere $215 per vehicle for health care, primarily because it has very few retired workers. On the other hand, GM pays out $1,635 per vehicle to cover health care costs for its active and retired workers, a difference of $1,420.
Meanwhile, GM’s Canadian division pays only $197 per vehicle for health care, just $97 more than Toyota Canada pays. So what’s the big secret to reducing GM’s health care costs and leveling the playing field with its chief competitor? No secret at all. It’s national health care. Canada and Europe have it. We don’t.
If Rep. John Conyers’ Expanded and Improved Medicare for All bill, HR 676, was passed today, GM’s loss of $333 per vehicle would turn into a $1,100 profit tomorrow.
So what’s the hold-up here when the benefits to business are so obvious? Opposition to national health care by GM and other companies can’t be based on sound business thinking; it has to be ideological. GM and Corporate America fear the “creeping socialism” national health care represents.
The funny thing is they seem to be able to live with it — and do quite well by it — in Europe and Canada. So why would they prefer to battle their U.S. workers in contract talks over who pays what for health care?
The smart thing for them to do is simply join hands with their partners in the United Auto Workers, as well as Ford and Chrysler, and head out for Washington, D.C., as soon as possible. The UAW can lobby their guys in the Democratic Party. The Detroit Three can lobby their folks on the Republican side.
Together they should be able to pull together a veto-proof Congress that can get America a First World health care system passed next year that covers everybody, saves us all money and keeps more of our good-paying manufacturing jobs from being shipped overseas.
Dave Mortimer is a labor activist in Detroit.