President Barack Obama Message Board

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Politics : President Barack Obama

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To: tejek who wrote (44654)	11/15/2008 4:40:43 AM
From: nigel bates	Read Replies (2) of 149317

>>I am really, really skeptical about this $73 per hour number.<< I think the average hourly rate is actually around $27. The $73 is the hourly cost to the GM, Ford & Chrysler, including such stuff as health care benefits and pensions. I don't know the calculation methodology (particularly how they account for existing healthcare liabilities - which is of course GM's major problem), and I don't know if the methodology is consistent across the various industries they compare. Clearly any restructuring will have to address the non wage costs in particular. My guess is that if the govt. can do even a half way decent job of coming up with a restructuring plan - and be prepared for tough negotiations with the unions - a bailout will be a great deal cheaper than allowing bankruptcy. Addressing the cost structure is a sine qua non, however.

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