The chart to the left 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.