AFSCME 3357-HOF'S BLOG

GM Profits down - Healthcare Costs up - by $1 BILLION

GM just announced that its profits will be down in the coming year. Some highlights: Profits from North American automobile manufacturing: $500 million. Healthcare costs: $5.5 BILLION, up $1 BILLION from last year. In other words, the cost of healthcare for GM rose by twice the total amount of its automaking profits (at least North American profits).

GM, as a matter of corporate policy has run hot & cold on the subject of a single payer healthcare system for the United States. According to an article from The Nation, that I read in the Public Citizen Health Letter, Daimler Chrysler is a public supporter of a single payer health plan.

In essence, the injustice is that our manufacturers, while facing stiff global competition, are subsidizing the healthcare of all of the family members of their employees. The beneficiary of these subsidies are free riders like Walmart that employ the spouses and children of the autoworkers and provide little if any heathcare coverage.

In other GM Earning news, GM disclosed that it expects to make $2.5 billion with its finance arm. How can it do that and sell cars at 0% interest? The quick answer is that when GM dealers sell a car at 0% interest, the automotive arm pays to the finance arm an amount meant to offset the market interest.


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