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High Costs Drown Competitiveness
Rising pension and healthcare costs have severely undermined American manufacturing competitiveness, particularly in comparison to foreign automakers who benefit from lower labor costs and non-unionized workforces. The burden of pension obligations significantly impacted companies like General Motors and Bethlehem Steel, leading to unsustainable financial pressures. With disproportionate ratios of retirees to active employees, these companies faced insurmountable pension deficits, prompting bankruptcies that threatened the solvency of the Pension Benefit Guarantee Corporation. As a result, the U.S. auto industry found itself in a precarious situation, grappling with overwhelming financial obligations.