Before 0bama stole GM and gave it to the unions, the biggest cost of each car GM rolled of the line was current and RETIREE health care. It was more than the total material cost of the automobile. I don't know what it is now but cannot imagine that union HC went down.
Emerging from the bankruptcy, the retirees (hourly, as well as salaried/executive) are now on Medicare when they become eligible for it, rather than GM's health plan for life. The health plan itself for active employees was also drastically reduced.......co pays, etc. increased significantly. Currently, GMs benefit plans for existing workers are fairly similar to those offered in most large industries. For example: New hires are offered 401K plans rather than the pension system that was in place in earlier years........there have been significant changes.
The UAW fought it all the way through the process, even from their BoD positions, however the financial underwriters of the new stock issue demanded these union concessions or the shares would have mever been sold at the IPO. In a rather bizarre manner the free financial market prevailed, to an extent, even with "Government Motors". Not much was ever discussed in the press, but that's the way it ultimately turned out.
With the new wage structure that was put in place for new hires at the same time, GM has the
potential to become very competitive regarding labor costs over the long haul.......whether they can maintain that is another isssue, however GM's main problem is its product offerings and market penetration, not its present cost structure.
In order to succeed in the long-term, they need to focus on product innovation......ditch big losers like the "Volt" (which was never intended to become a production vehicle anyway........it was a "concept car" built for the NY Auto Show)., and create exciting product offerings.
doc
