I have been watching Rick do interviews for several years. It seems that he never fails to talk about the health care cost disadvantage at GM. The number that he uses is $1,600 in health care costs in each car that GM sells. This number has been repeated by business reporters and pundits. I decided to check the facts. In 2007, GM's health care costs were $4.6 Billion. That is a huge number but when you look at health care costs as a percentage of total costs it come to 2.1% of total costs. Additionally 2/3 of the health care costs are for retirees.
Lets do the math.
GM built over 9,000,000 cars in 2007 when you divide the $4.6 billion in health care costs you get $511 per car. If you only include US manufactured cars the cost per vehicle is increased to $1022 per vehicle. It is still far less than the $1600 that Rick has used consistently over the past several years.
So we've done the math and we are doing exactly what Rick wants us to do. Focus on health care. GM's 2007 annual report mentions health care 91 different times. The annual report doesn't mention poor management even once. If GM's health care costs were zero in 2007 GM would still have lost over $34 Billion dollars. Simple analysis show there are much greater problems at GM than health care.
Lets do the math.
GM built over 9,000,000 cars in 2007 when you divide the $4.6 billion in health care costs you get $511 per car. If you only include US manufactured cars the cost per vehicle is increased to $1022 per vehicle. It is still far less than the $1600 that Rick has used consistently over the past several years.
So we've done the math and we are doing exactly what Rick wants us to do. Focus on health care. GM's 2007 annual report mentions health care 91 different times. The annual report doesn't mention poor management even once. If GM's health care costs were zero in 2007 GM would still have lost over $34 Billion dollars. Simple analysis show there are much greater problems at GM than health care.
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