The truth is that U.S. auto firms are being battered by a global economic collapse that has undermined car sales everywhere, leading to demands for government bailouts in every country where cars are made. But the even greater truth is that U.S. firms have been hit harder than many of their competitors by stalling car sales.
That's because it costs more to make cars in the United States. Even though U.S. autoworkers have accepted pay cuts and efficiency schemes that mean they make less than autoworkers in many other countries, the enormous expense imposed by this country's for-profit health care system places an extreme burden on firms that manufacture vehicles in the U.S. How extreme? It is estimated that health care costs add as much as $1,400 to the cost of a car made in an American plant.
So a new bailout, without a serious focus on health care reform, is at best a temporary fix, as three Democratic House members from the hard-hit manufacturing states of Ohio and Michigan explain in a new letter to GM CEO Richard Wagoner, Jr.
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