S.-based manufacturers. What specifically occurred with GM however was the willingness to pay for healthcare for all UAW members now either retired or let go due to lack of product sales driving production (Vlasic, 1). GM is also very similar to other manufacturers in that their reliance on unions for key skilled workers, compounded by intense political pressure not to pursue skilled talent in other nations, forced GM into a no-win situation with the unions. They could not pursue outsourcing due to intense political pressure and the corporate tax implications of a massive layoff, and re-tooling for high levels of automation in plants would be even more expensive than agreeing to the unions' demand. As a result of these and less strategic, yet just as critical factors, GM faces a question of financial viability for the first time in its history.
Another, broader and more strategic trend which has been the underwriting of the American healthcare system predominantly by corporations, and as a result, our nation has one of the highest cost healthcare systems in existence. The UAW senior management and negotiating teams realize that healthcare costs grow in high single digit...
This has served to only make the costs of healthcare for union workers all the more difficult to predict year-to-year with any level of accuracy, while at the same time forcing the company to pursue cost reduction and plant closing strategies, trimming models from each GM line, in the hopes of staying competitive.
References
Jacoby, Jeff. GM's Healthcare Dilemma. The Boston Globe (Boston.com). June 16, 2005. EBSCOHost Academic Search Premier. May 29, 2007 from location:
http://www.boston.com/news/globe/editorial_opinion/oped/articles/2005/06/16/gms_healthcare_dilemma?mode=PF
Vlasic, Bill. GM: Health Care Key to UAW Talks. The Detroit News. January 9, 2007. EBSCOHost Academic Search Premier. May 29, 2007 from location:
http://detnews.com/apps/pbcs.dll/article?AID=/20070109/AUTO04/701090349/1040/LIFESTYLE03
Teslik, Lee Hudson. Healthcare Costs and U.S. Competitiveness. May 14, 2007. EBSCOHost Academic Search Premier. May 29, 2007 from location:
http://www.cfr.org/publication/13325
