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Posted by: Michael Mandel on July 13
I’ve been trying to understand why General Motors is so oppressed by legacy costs, and I think I finally have got it. Look at this table:
|*2004 for GM, 2003 for Honda and Toyota|
GM, a company with 300,000 employees, is supporting the number of retirees appropriate for a company with a workforce of 800,000, almost triple the size.
Meanwhile, Toyota and Honda, both growing companies, are supporting a retiree base which is relatively small compared to their current workforces.
Definitely a case where GM is still being punished today for mistakes it made in the past.
Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.