Health Care Benefits Affects Comparative Advantage

After reading "Globalization Drives Changes for U.S. Automakers" its apparent that as long as the Big Three (GM, Ford, and Chrysler) are burdened with outrageously high health care costs and benefit packages it will be nearly impossible for them to compete with foreign car manufacturers. In 2008 GM spent 4.8 billion on health care costs alone. This in turn increases the price of every vehicle produced by $1,500. Health care costs for Japanese competitors are not nearly as high as U.S. manufacturers, because of this Toyotas health care costs create only a $200 increase per vehicle. This gives Toyota a $1,300 cost advantage. 

If this isn't enough to completely eliminate any chance of the Big Three competing with foreign manufacturers, these companies are also paying $6 more per employee in wages then Toyota and Honda factories located in the U.S.. With GM and Chrysler receiving a $17.5 billion loan to prevent them from going into bankruptcy in 2008, its clear these U.S. car manufacturers cannot competitively compete while they are expected to pay such high wages and benefits.