GM's HEALTH PROBLEM

GM has just confirmed that the cost of health care is a real crisis for them. Costs are expected to increase 7-8% to 5.6 BILLION. They just posted a HUGE loss for the quarter.

Excuse me if I don't cry but they did create this crisis with their eyes wide open and now they want help. GM and the unions want the federal government to step in and make the problem go away by instituting a national health plan - not so fast. That is a subject for another blog. Lets see what can be done.

The UAW said that they are unwilling to re-open their contract; as expected. GM has historically given the unions everything they desired just to keep them from striking. They are now paying for that corporate idiocy. I hope the hundreds of lawyers on the GM payroll are going over that contract with a fine-tooth comb to see if they can spot any holes in it.

1. Health coverage for retired GM workers needs to be brought into reality. Currently they are covered by Medicare as well as private insurance. They need to be switched to a "Medicare Plus" plan offered by local HMOs. In this plan, Medicare covers most of the costs with the "Plus" coverage kicking in to cover the rest. Drugs and office visits should have at least a $10 deductible.

2. Move UAW workers into the white-collar health plans. Currently, what UAW workers receive as health care coverage is downright obscene, wasteful and in no way realistic. Their plan is unsustainable in today's economy. UAW workers basically contribute 7% towards their health coverage; that is a joke. White-collar workers contribute 27%. Both groups of workers should be placed into the 30% contributing rate. Co-pays, deductibles and premium contributions should be instituted at once.

The above are not really sacrifices; they are a dose of reality the rest of us in the country are dealing with.

GM also needs to stop quarterly stock dividend payments. If this is a real crisis lets behave accordingly.

GM is responsible, first, to its stockholders (owners) and they must not forget that. The UAW needs to protect its members and their futures and therefore needs to work hand in hand with GM to guarantee the health of the corporation.

Asian companies are kicking our asses. They have the luxury of avoiding all the historical mistakes we have made in this auto industry but we are Americans and we need to show the world that we invented the modern auto industry and we can re-invent it if need be and the need is REAL.

Janusz