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Are health care costs hurting Detroit? Absolutely. Is it because the packages are too generous?  Not exactly.


Prior to last year’s UAW contract negotiations, Ford was spending about $3.5 billion per year on healthcare, and GM was spending about $5.4 billion.  But if America spent the same amount for healthcare that the rest of industrialized nations do, its healthcare bills would be less than half (about 40%) of what they now are.  Ford would have saved about $2 billion last year – and GM could have saved about $3.1 billion.  In fact, more than 80% of Detroit’s North American losses last year would have been wiped out – if only America had a healthcare system that was as affordable for employers and workers as the rest of the industrialized world.

Automaker health care costs are from the companies (2005).  Global health care costs based on OECD data (2005).

Automaker health care costs are from the companies (2005).  Global health care costs based on OECD data (2005).

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