By January 26, 2007 1 Comments Read More →

A Tax On Bad Management

U.S. Car Makers Stand to Gain From Bush Plans – WSJ.com:

“Though many factors have contributed to the industry’s woes, soaring health-care costs are a big part of the problem. The Detroit giants are paying the price for years of buying labor peace by agreeing to provide rich health-care and other benefits to their unionized workers. GM, for example, has said its health-care costs average as much as $1,200 for each car it sells in the U.S.”

There are two separate factors here: 1) healthcare in the U.S. is too costly, in general, but 2) GM gave away super generous benefits, such as the UAW workers making zero contribution, zero co-pays, etc.

As the article puts it, the company was “buying labor peace.” It’s too bad GM, etc. couldn’t get labor peace by treating employees with respect day-to-day and over time. The wounds from how GM management treated UAW workers (generally speaking, and I saw this first hand in the 1990’s) were so deep, that they had to try to spend their way out of it. Were the UAW folks to think “Management treats us like garbage, but at least I don’t have to pay for healthcare.” I guess that’s labor “peace,” if peace is defined as management and the UAW not nuking each other out of business.

I look at the “high healthcare costs” that GM is suffering as a “tax on bad management” basically. I don’t feel much pity for them. They made the bed they are now struggling to get out of. I’ve been away from GM too long…. is the company doing any better at treating employees with respect and collaborating with them? Or is it still old-school GM at the plant level? I’d like to hear your comments if you’re closer to GM than me.

Please check out my main blog page at www.leanblog.org

The RSS feed content you are reading is copyrighted by the author, Mark Graban.

, , , on the author’s copyright.


Thanks for reading! I’d love to hear your thoughts. Please scroll down to post a comment. Click here to receive posts via email.


Now Available – The updated, expanded, and revised 3rd Edition of Mark Graban’s Shingo Research Award-Winning Book Lean Hospitals: Improving Quality, Patient Safety, and Employee Engagement. You can buy the book today, including signed copies from the author.

Related Posts Plugin for WordPress, Blogger...
Please consider leaving a comment or sharing this post via social media.

Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an eBook titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

Posted in: Uncategorized
Tags: ,

1 Comment on "A Tax On Bad Management"

Trackback | Comments RSS Feed

  1. Josh says:

    Good way of describing it. I’m reminded of the peace deal brokered between Israel and Egypt: the US basically bribed the two countries not to fight for a few billion a year. Of course, Israel could have paid Egypt, or vice versa, but in this case some third party, the US, took a look at the external cost of the conflict and stepped in. Is there an analogous action in our policy towards domestic manufacturers? If the government were to step in and subsidize healthcare, what concessions would we expect from GM and the UAW?

Post a Comment