GM sees no government relief on health care
DETROIT (Reuters) – General Motors Corp. said on Wednesday
that it sees no near-term relief from the U.S. government on
its massive health-care costs.
“I don’t think there’s any enthusiasm at the political
level to do anything on health care, period,” said GM Chief
Financial Officer John Devine.
“Maybe that will change in the forward years but there’s no
enthusiasm to do anything on health care that we can determine,
so we can’t wait for any kind of government solutions on health
care,” he said.
He spoke on a conference call with analysts and reporters
after the world’s largest automaker, which is also the nation’s
leading private provider of health care, posted an unexpected
second-quarter loss of $286 million due to soaring costs for
everything from materials to health care.
On the call, Devine warned that high costs were undermining
the competitive position of all manufacturers in America and
putting growing pressure on automakers and their suppliers to
shift work to low-cost labor markets in Asia and Eastern
Europe.
GM has been in potentially explosive talks since April with
the United Auto Workers union about rolling back the
health-care benefits of hourly employees. The company provides
health-care coverage for 1.1 million workers, retirees and
their family members.
“Health-care relief really is a fundamental driver of us
being successful going forward,” Devine said.
“We think this is an urgent matter that we have to tackle
now,” he said.
Devine added that while the government may offer some ways
to rein in health-care costs over the long term he does not
believe that a national health plan is in the cards.
“There’s a lot of opportunity but our sense is it’s going
to take a long time for that to bear any fruit in Washington,
if ever,” Devine said.
GM’s second quarter loss followed a deeper $1.1 billion
loss in the first quarter. That is when the industrial icon,
which has long said that it spends more money on health care
than it does on steel, alarmed markets about its current cost
structure problems in North America.