At Reason, Shikha Dalmia provides a good overview of the health care legacy costs weighing down Detroit’s auto industry, and the United Auto Workers President Rob Gettelfinger’s push to get even more.
Mr. Gettelfinger has already declared that he is not in a “concessionary mood.” UAW workers at Ford and GM agreed to a health-care cost-sharing deal during an unusual round of mid-contract negotiations in 2005. Closing the competition gap with Japanese auto makers now, Mr. Gettelfinger insists, requires not more concessions by auto workers—but a Japanese-style government health-care system for all workers…
Doubtless, some of Mr. Gettelfinger’s tough talk is posturing, calculated to extract the best possible deal from auto companies. Yet his perennial calls for a national health-care system — echoed by leading Democratic presidential candidates — affect the dynamics at the bargaining table: By feeding the notion that Japanese workers are getting a better health-care deal than UAW workers, they make it harder for Mr. Gettelfinger to make reasonable compromises and sell them to his rank-and-file.
Powerful unions and leading politicians calling for what would result in Canadian-style surgery waiting lists is bad enough, but there there may be voices in corporate America ready to join this chorus. Earlier this year, some CEOs, including Wal-Mart CEO Lee Scott, expressed support for universal coverage, alongside Service Employees International Union President Andrew Stern.
As Shikha Dalmia notes, “the so-called competition gap that Motown auto makers and the UAW complain about is created by the lavish health-care and pension deals they wrote themselves—not by Japan’s nationalized health care system.” So what did the pro-universal coverage CEOs cite as one of their main concerns? As MarketWatch reports, “Business leaders lamented that health-care costs under the employer-provided model are saddling U.S. companies with burdens not faced by firms in countries with government-provided health care.”
After the meeting between Stern, Lee, et al., Club for Growth President Pat Toomey told MarketWatch, “Seeing Lee Scott on the same stage with Andrew Stern calling for universal health care coverage reminded me of the old [Leninist] maxim that a capitalist will sell you the rope used to hang him.” However, we may be looking at the equally frightening prospect of companies and unions joining together to use said rope to hang their health care costs around taxpayers’ necks.