Looking at the numbers, Ian Welsh argues that GM and Chrysler would be profitable if only we had universal health care

by Ken

First, John Hinderaker at the hard-right PowerLine blog wrote a post yesterday called "NO UAW BALLOT," in which he argued that the Big Three automakers are doomed, done deal, kaput. "This chart pretty much tells it all," he wrote.


Then our colleague Ian Welsh, one of our chief go-to guys on matters economic, took a closer look at FireDogLake:

Begun, This War On Christmas Has.
Powerline Proves Universal Health Care Makes GM and Chrysler Profitable
By Ian Welsh

The chart [above] shows the losses and profits per car of some major car companies. John over at Powerline uses it to argue that there should be no bailout, because the Big 3 are so unprofitable it's just pointless. Let's do some simple math. Take a look at GM's loss per car, about $700. What is GM's cost per car for health care? $1,500. What happens if you add $1,500? A profit. Of $800/car.

What the chart proves is that American car companies (except for Ford) are only not profitable, at this point, because of health care costs. The simplest thing to do to help the US economy (by not losing millions of jobs and one of the few remaining export industries) is to just pass universal health care, taking those costs off them, and in the meantime give them bridging funds to get them by until that's done. Foreign car companies have far fewer health care costs, so all universal health care does is even out the playing field. Even Ford, with health care costs off, would be very close to profitability.

My thanks to the folks at Powerline for making the case for universal healthcare and for helping the auto industry so clearly.

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