Tracedaddy

The article I was referring to is:

George Will


I think the point is that although it's more economical for foreign companies to establish factories in the US to produce vehicles sold in the US, a majority of their operations are still not located here. The additional costs incurred by those plants can be dlluted as part of the big picture.

Black GT

Thanks for the article.

JStang78

Actually, it's not so much that they provide health insurance to their employees, but that the union's agreement provides that the companies pay such a high percentage of the premiums, and further, that those benefits are protected after retirement, not to mention the pensions that many former employees enjoy. So, while say, Toyota, may have an employer-sponsored health care program, they do not pay the same percentages toward that program that the American auto manufacturers do under the agreements that the American companies have with the union. Also, as is almost always the case when you allow someone to corner the market, as these unions largely have, I suspect there's some collusion going on that prevents GM and Ford from accepting competitive bids from insurers, instead forcing these companies to contract with some union-friendly health insurance provider (just my personal skepticism there). The costs of union labor, as a result of their past agreements and business practices, goes far beyond the immediate costs involved with current employees, but also to those who retired.

George Will is wrong, however, in saying that the money spent on health care diverted from, specifically, research into hybrid vehicles. That is at least partly the result of bad management and obstinence. Bob Lutz calls hybrid cars "bad business." No, I think the lag behind the Japanese in technology was more an approach to how the Koreans approached improving quality in their cars: let the Japanese do it and we can implement their changes without any of the R&D costs.

RStone13

You have a point & your very funny. LOL
It may cost a little more because of union workers. But they don't design it. They just put it together.