Hi Tracy,

Thanks for the clarification.

>First, a large portion of the medical benefits for retirees is paid from taxes in Europe so it is a shared cost and not carried entirely by the manufacturer like it is here.

I can't speak for all european countries, but up here healthcare and retirements are not really paid from taxes. Every citizen is obligated to have healthcare coverage and needs to pay for it directly or indirectly (through employer). If you are working at company that has some collective arrangement with an insurer then you might get a better deal. As for retirements, every worker needs to pay for the current retirees (so not for your own). This is collectively maintained by a pension fund.

But you're right, in the sense that it is collective and spreading the risks of companies with older workers, or have bad luck with a lot of illness in your company.

>Second, the job-bank is a social program where the cost is carried entirely by the company as well. It is for anyone laid-off or unable to work for any reason and provides the worker with 90% of his pay.

Not so much different from here, at least for the 1st year. After one year, the government takes over the payments.

>Third, some studies showed it takes about 30 hours to produce a vehicle at a cost of $1000 for Toyota, and 35-45 hours to build a vehicle here at a cost of $1500-2000. The whole process needs to be revamped for efficiency here.
>
>Fourth, look at the salary of the management. Start witht he CEO. The CEO of Toyota makes around $1mil while the CEO of Ford takes in $28mil/yr.
>
>Fifth, new workers (janitors even) start out at $28/hr. The average 'seasoned' worker earns $51/hr. Toyota's U.S. workers cost about $47.25 an hour, which includes $31.50 in actual pay and $15.75 in benefits.
>
>The list could go on and on....


>
>Here is a site which looked at the new salary plan which is an improvement over the old practices, but keep in mind that it only applies to new employees:
>
>http://www.bloomberg.com/apps/news?pid=20601087&sid=aDsw8mVBN.R8&refer=home


>A snippet:
>
>The lower-paid jobs, along with a shift of $50 billion in health-care obligations to the union fund, would help GM Chief Executive Officer Rick Wagoner narrow an estimated $25- to $30- an-hour cost gap with Toyota Motor Corp.'s U.S. factory workers. GM pressed the UAW for concessions after $12.4 billion in losses for 2005 and 2006.
>
>And that was in 2007!!!
>
>In essence, the social programs the employees and ex-employees of the automakers here are provided and paid for by the company and the current employees. The cost is not shared by all tax-payers. The company bears the entire cost. Then, add in the poor management, lack of efficiency, and the high management salaries...

I agree on the management and efficiency. And I agree that in NA carrying retiree costs is riskfull. However I stand by my statement that healthcare costs should be manageble by such large companies. Anyways, if Obama will gets it his way, this not going to be an issue within a few years anyways.