Saturday, May 07, 2005

SUVs, Health Care, and Conservative Priorities

You can file this under "Rush Limbaugh has his finger on the pulse of the nation." Apparently SUVs are not the reason GM and Ford are having a hard time despite many other analysts coming to that conclusion. Rush's proof? There are still SUVs on the road. Yep. And competitors, particularly Japanese companies are not in the red, but are making SUVs.

A few points one might bring up. First of all cars don't dissappear immediately because they aren't popular. There may very well be some SUV drivers who wish they had got a more fuel efficient car, but aren't ready to sell theirs just yet. And there may be others who don't care about high gas prices because they got tons of money anyway. Many of those sorts probably live in Rush's neighborhood. Secondly, Toyota and other companies provide stronger alternatives on the fuel efficient side of the scale.

But then he gets to the real reason GM is having hard times in the stock market.
One of the big differences, and it's just interesting in a competitive sense or comparison. I'm not giving you a statement of advocacy or opinion on this, but in Japan, the health care and pension plan for their autoworkers is paid for by the government. In United States, the health care and pension plans of employees in the automobile industry and most others is paid by the company. Now, I don't want to get into a discussion, "Rush, government, whatever, it's all paid for by the people." I know this. But, in terms of accounting and in terms of profit and loss, if Toyota or any other Japanese firm goes into the year not having to spend $5.6 billion a year in benefits that GM has to spend, what's GM going to have to do to the price of its cars in order to make that back? Right now, the price per car in General Motors if you average it all out, to pay for their employee health care and pension plan is about 1500 bucks. Japan does not have to pad the price of their car with a dime for their employees' health care or pension plan because the government pays it.
So basically Rush is against workers having employer run health plans or pensions. Of course he is opposed to the government stepping in as well.

Rush has claimed to be a champion of the worker in the past. Not sure how this squares with that.

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