General Motors, and what is left of Chrysler, are back asking for another government bailout. And Americans who recognize that an auto industry is a good deal more vital to the country’s future than those bankers who are using taxpayer billions to retrofit their executive washrooms will be inclined to sympathize with the plea.
But before another bailout check is inked, wouldn’t it make sense to get the auto giants – even if they are not so giant anymore – involved in addressing what really ails their industry?
No, it is not autoworkers. Members of the United Autoworkers union have given concession after concession after concession in order to save an industry that their union leadership called for modernizing – with the development of smaller, fuel-efficient cars – more than three decades ago.
And, no, it is not entirely the visionless management of GM, Chrysler and Ford, although it frustrating to recall the opportunities missed by CEOs who rejected smart union advocacy on behalf of the industry’s long-term future in favor of ever-bulkier SUVs, schemes to turn from manufacturing to financial services and, when it came time to balance the books, factory closures and layoffs.
The truth is that U.S. auto firms are being battered by a global economic collapse that has undermined car sales everywhere, leading to demands for government bailouts in every country where cars are made. But the even greater truth is that U.S. firms have been hit harder than many of their competitors by stalling car sales.
That’s because it costs more to make cars in the United States. Even though U.S. autoworkers have accepted pay cuts and efficiency schemes that mean they make less than autoworkers in many other countries, the enormous expense imposed by this country’s for-profit health care system places an extreme burden on firms that manufacture vehicles in the U.S. How extreme? It is estimated that health care costs add as much as $1,400 to the cost of a car made in an American plant.
So a new bailout, without a serious focus on health care reform, is at best a temporary fix, as three Democratic House members from the hard-hit manufacturing states of Ohio and Michigan explain in a new letter to GM CEO Richard Wagoner, Jr.
“You have convincingly articulated the effect of health care costs on GM’s competitiveness for years. Though the Voluntary Employee Beneficiary Association agreement with the United Auto Workers (UAW) has provided some short-term relief of health care costs by relinquishing financial responsibility for retiree care, the health care costs of current employees remain. Unless those costs are controlled, financial relief will be temporary,” write Ohio Representatives Dennis Kucinich and Marcy Kaptur and Michigan Representative John Conyers.
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“As the nation’s largest provider of health care in the U.S., GM is likely to have captured the majority of the efficiencies that can be gained under a system with multiple, competing insurers. If true, systemic health care reform is the remedy of choice,” explain Kucinich, Kaptur and Conyers, who add that, “There is a model for health care finance that has proven in several countries to control costs, provide health care to all, and increase the quality of care: national health insurance, which is embodied in H.R. 676.”
H.R. 676, the United States National Health Care Act, is a single-payer reform that would, the House members explain, provide “all American residents would receive a National Health Insurance card. The card would be good for health care services at all health care facilities across the country in the National Health Insurance system. Families would be able to choose any licensed doctor and any hospital. There would be no premium, deductible or co-payment. No one would receive a bill for any medically necessary health care services, and by eliminating inefficiencies, the plan would cost the same amount of money that is now spent on health care.”
That’s good for Americans.
And, in this case, what’s good for Americans is good for General Motors.
So, the members of Congress suggest that, in order to show he is serious about renewing GM and the U.S. auto industry, Waggoner should get GM on record as an endorser of H.R. 676.
Such a move, placed in the context of a discussion about another bailout for auto firms, would get attention focused on the Conyers-sponsored bill, which has attracted more than 90 cosponsors in the current Congress. And it would turn a vague discussion about the need for health care reform, and the role such reform could play in stimulating the economy, into a serious debate about the sort of changes that really are needed but that are not always discussed in media reports or White House strategy sessions.
Here’s the message Kucinich, Kaptur and Conyers sent Waggoner on Thursday:
As part of our ongoing efforts to ensure that the auto industry continues to be competitive, we write to engage you in a discussion about solutions. With a difficult economic outlook, plummeting auto sales, efforts already underway to cut costs relative to the competition, and health care costs rising faster than inflation, there has never been a more prudent time for GM to endorse H.R. 676, the United States National Health Care Act. We invite you to meet with us to discuss the matter in person.
You have convincingly articulated the effect of health care costs on GM’s competitiveness for years. Though the Voluntary Employee Beneficiary Association agreement with the United Auto Workers (UAW) has provided some short-term relief of health care costs by relinquishing financial responsibility for retiree care, the health care costs of current employees remain. Unless those costs are controlled, financial relief will be temporary.
As the nation’s largest provider of health care in the U.S., GM is likely to have captured the majority of the efficiencies that can be gained under a system with multiple, competing insurers. If true, systemic health care reform is the remedy of choice. There is a model for health care finance that has proven in several countries to control costs, provide health care to all, and increase the quality of care: national health insurance, which is embodied in H.R. 676.
One such success story can be found in Canada, where Canadian GM, Ford and Chrysler have publicly declared their support for Canada’s health care system specifically because of the competitive advantage it gives them over their American counterparts.
If H.R. 676 was implemented, the benefits to GM would not be limited to cost control. H.R. 676 would reduce liability insurance & workers compensation costs; eliminate the cost and inconvenience of running a health benefits bureaucracy; eliminate employee concerns about rising premiums and co-pays and conflicts with labor unions over benefit cuts; free up money for consumer spending; reduce absenteeism; and produce a healthier, more productive work force.
Momentum behind H.R. 676 is increasing by the day. It garnered 93 cosponsors in the 110th Congress including multiple Chairs of committees and subcommittees of jurisdiction. Fifty-nine percent of all physicians and about 60% of the American public now support a national health insurance plan like H.R. 676. The California State Assembly has twice passed such a bill in the last three years. National health insurance is supported by the deans of prominent medical schools, a former New England Journal of Medicine editor, a Nobel Laureate, a former Surgeon General, the US Conference of Mayors, the US Presbyterian Church, the League of Women Voters, Consumer’s Union, and the UAW.
To learn more about H.R. 676 and the campaign to enact it, check out the Leadership Conference for Guaranteed Health Care site and the continuing efforts of the group with which Conyers has worked closely on this issue, Progressive Democrats of America.
