Somebody’s gotta ask!

by cactus

Questions About the Big 3, and Legacy Costs

I keep hearing that the Big 3’s Problem is that it has all these legacy union retirees who are expensive as all heck to maintain and add tremendously to the cost of manufacturing cars. That raises a few questions:

1. How many years will it be before Honda and Toyota and BMW and other foreign manufacturers who make vehicles in the US have burdensome legacy retiree costs of their own?
2. If there are new entrants into the market when these companies are burdened by legacy retiree costs, won’t these companies which we currently laud as efficient be disadvantaged relative to new entrants then? Is this an endless cycle until such a point as nobody offers retirement benefits?
3. Honda and Toyota and BMW and the rest of ’em offer retirement benefits to workers in their own home countries. A part of the reason their home-country retirees aren’t considered such a big burden on these companies is that the state covers the bulk of the retirement costs for their former employees.
4. Given 2. and 3., are the only options no retirement benefits, or benefits covered by the state?
by cactus