GM Chairman on America's Manufacturing Issues

[Aurora40]

Wagoner Hits Weak Dollar, Healthcare

Warning that American manufacturing, as a whole, is in danger, and not just the domestic auto industry, General Motors Chairman Rick Wagoner called for action in three major areas that "put us at a clear competitive disadvantage." In a speech to the Chicago Economic Club, the GM CEO insisted that purposely lopsided Asian exchange rates now account for 60 percent of the U.S. trade deficit. "We should demand Asian nations stop intervening in exchange rates completely and forever," Wagoner demanded. The industry veteran also stepped up his increasingly vocal campaign to rein in skyrocketing medical costs. In all, Wagoner noted, GM spent $5.2 billion last year on medical coverage for 1.1 million active workers, retirees and dependents in the U.S. That, he revealed, is about $4 billion more than a leading competitor, which while not directly named, appears to refer to Toyota . That's money that could go far were GM able to use it for new plants and products, Wagoner lamented. Dealing with issues like catastrophic care, the uninsured and spiraling pharmaceutical costs would help, but the CEO also called for new restrictions on malpractice legislation. Tort reform was, in fact, the third big area, Wagoner warned, that must be addressed if America hopes to regain a competitive edge for its manufacturing base.

From: www.thecarconnection.com/index.asp?DID=RSS&n=173&sid=173&article=8115

[omegaic]

It is unfortunate that nobody will listen to Mr. Wagoner. You can see the value of the USD declining every month.

[scottydl]

omegaic said:

You can see the value of the USD declining every month.

Absolutely, which most people refer to as "inflation"... which really doesn't exist, it's just a measure of how the USD is viewed in the global level. With the exorbitant amount of credit out there, based on money that doesn't actually exist, I don't think the U.S. economy can survive at this rate for long.

[Aurora40]

omegaic said:

It is unfortunate that nobody will listen to Mr. Wagoner. You can see the value of the USD declining every month.

The USD declining is actually good for American companies. It makes imports more expensive and exports cheaper. This is exactly how Japan works, they try to devalue their currency for exactly this advantage.

[omegaic]

The devaluation of US money is only good for other countries, look at the trade deficit for 2004. Our defecit has increased 200,000 BOP in the last 2 years.

www.census.gov/foreign-trade/Press-Release/current_press_release/press.html

Our economic decline is due to the boatloads of cheap foreign goods and mega-marts. Pretty much nothing is made in the USA anymore. Can't blame the government entirely, it's us that keep looking for the cheapest goods. In doing so, we are putting American manufacturers out of business.

[kobalt]

Dollar declining in value might be (and it is) good for american companies, but I find it quite the opposite for myself. My annual raise does not cover the lost value of the dollar and I find myself making more money that has less worth than the smaller amount I made last year


While us production is getting more attractive due to falling dollar value, the cost of living is still steadily increasing every year. So, making more $ that is worth < yesteryear's $ + increased cost of living = unhappy kobalt

When the consumer's hard-earned penny is consistantly worth less and less its no wonder that people look for deals. This is exactly why superstore chains like walmart thrive in america. In the end thanx to inflation we end up buying ourselves out of jobs.

[Letitroll98]

It's very hard to tell a manufacturer to retool for a new product in the USA when the costs are 10 times the cost of retooling the same product in the Far East or South America. My father could only afford to manufacture products that didn't compete directly on price in the US, all others were manufactured offshore. The US auto industry has done well to keep as much manufacturing here as they do. Robotics, economies of scale, and their dealer network make it difficult for interlopers to start up. Honda and Toyota spent decades building up to compete. Mr. Wagner is wise to address these issues now.

Healthcare in the US is a morass that cannot be fixed without significant readjustment pain for almost all Americans. The medical community has no concept of cost control. Some of this comes from tort liability, but most of it is because they don't have to. There is no mechanism for cost control other than the insurance companies. So you end up with a bureaucratic system like the former Soviet Union whereby a central governing body (ins. co's) issues edicts from afar that are supposed to solve on the scene problems. Stay in any US hospital for a week. If you ran a company like that you would be out of business in four months or less.

A few suggestions get rid of all tort liability for medical personnel. All of it. If you can get a DA to file criminal negligence charges, that would be your only recourse. If you don't like it, go to a witch doctor in Bora Bora. If you want other protection, buy a warranty like cars. People would actually have to shop for good doctors like any other product, any protections they would pay for.

Make most hospitals for profit institutions. Yes, this is a Hobson’s choice, but there is no viable alternative and I said the readjustment would be painful. Socialized institutions would be made available for the poor and working poor in inner cities and rural areas. The idea that all Americans should have equal health care at the highest level will bankrupt us, it is totally unrealistic.

If you contribute enough to get the good health care at for profit institutions, good for you. If you wait for the government to pay for it, you will get somewhat less. Old folks on Medicare will die sooner because of reduced care options. I'm sorry grandma, but we have to put you on the ice flow for the polar bears, you can't keep up with the tribe anymore. Is this right? I don't know.

The other choice is to accept a lesser role in the world economy and pay for everyone’s health care. Socialized medicine. Everyone gets a little less, but everyone gets the same. Lines, lower paid and less doctors, fewer medication options, crowded hospitals, hard decisions, no more "do whatever it takes" to keep people alive. America will have to decide one way or the other. Continuing on this path is obscene.