GM Layoffs and The High Cost of Healthcare
by Scott Shields, Mon Nov 21, 2005 at 02:28:34 PM EST
Though GM refuses to endorse a single-payer universal healthcare program for the United States, they love that same system as it exists in Canada. Dave Lindorff wrote about this paradox back in the April issue of In These Times. He says that the problem is the conservative ideology of America's executive class.Just two years ago, GM Canada's CEO Michael Grimaldi sent a letter co-signed by Canadian Autoworkers Union president Buzz Hargrave to a Crown Commission considering reforms of Canada's 35-year-old national health program that said, "The public healthcare system significantly reduces total labour costs for automobile manufacturing firms, compared to their cost of equivalent private insurance services purchased by U.S.-based automakers." That letter also said it was "vitally important that the publicly funded healthcare system be preserved and renewed, on the existing principles of universality, accessibility, portability, comprehensiveness and public administration," and went on to call not just for preservation but for an "updated range of services." CEOs of the Canadian units of Ford and DaimlerChrysler wrote similar encomiums endorsing the national health system.
How can the same corporations that in Canada recognize the bottom-line logic of a national health system be so opposed to the idea here?
One answer is ideology. The notion of having the government take over an industry that represents about 15 percent of the U.S. economy gives U.S. executives the willies. But in backing insurance company interests, GM runs counter to both its own business interests and the sentiments of many customers.
I should note that one of the plants GM is closing is actually in Canada. Buzz Hargrove, the head of the Canadian Auto Workers, who was surprised by the announcement blamed GM's poor performance on the "unfair trade situation" between the Western auto manufacturers and Japan and South Korea who "ship into our market but they don't allow us to ship back to their market."
There's certainly a case to be made for trade policies impacting GM, but it's hard to ignore the fact that $1,525 of every GM car sold in the United States goes to paying for healthcare costs. If GM were not dealing with an employer-based healthcare system, they would certainly not be in the situation they are right now.
As the General Motors layoffs are showing us, even though it may make some uncomfortable, a clear case is to be made for universal healthcare in the United States. Simply put, it's an issue of competitiveness. There's a reason GM is cutting thousands of jobs mostly in American factories. The executives will never admit it for political reasons, but the crushing burden of healthcare costs is taking away American jobs. While universal healthcare has long been an interest of the party, it's often pushed to the back, being seen as too controversial. But now that Democrats have seemed to find their footing and the will to fight back, it certainly seems the time has come for bold healthcare proposals supported by obvious economics. This issue should be a no-brainer for Democrats in 2006 and 2008.