Word: detroit
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...other hand, there's John Dingell. Michigan's eternal Congressman, defender of Detroit's carbon-spewing gas hogs, would seem an unlikely cause for optimism. After all, his wife Deborah is a General Motors Foundation trustee, leading his critics to assert that Dingell is literally in bed with the auto industry...
...Detroit Three, though, held out. When they ran into trouble in the early 1980s, the UAW gave some ground on benefits. But in the 1990s the automakers came roaring back to profitability--helped by falling gas prices (which boosted the pickup and SUV segments still dominated by Detroit), a booming stock market (which made pensions easier to finance) and a slowdown in medical-cost inflation...
Early in this decade, all three of those trends reversed, and Detroit was suddenly in big trouble again--bigger trouble, in fact, because the companies' ratio of retirees to active workers has only grown. Which has turned up the pressure on retiree benefits. In the case of pensions, GM, Ford and Chrysler now all have enough money set aside to meet their obligations. But none put much in the bank to cover future health-care costs...
...company's rank and file are less than thrilled about their employer's leaving the warm embrace of Germany and falling into the hands of New York financiers. "These private-equity firms are like modern-day robber barons," said a worker at the company's Warren truck plant outside Detroit. "People are feeling betrayed by the management...
...last year by tiremaker Goodyear: paying the union a lump sum to take over retiree health care for good. But health-care reform won't come for a couple of years, if ever, and for automakers that lump sum would be staggering. So it's hard to see how Detroit can avoid a major showdown this summer. Road Race. The Fight for the U.S. Market [This article contains a complex diagram. Please see hardcopy of magazine.] Sources: Center for Automotive Research; Ward's Automotive Group; company reports