GM is a factory with a semi-skilled labor force. They produce very expensive goods. Because of this, they don't produce at maximum output all the time. If sales numbers slump one month, they cut production. To cut production, they have to cut their workforce. When they cut their workforce, they don't want to fire someone that has a lot of experience because they may just need him/her next month when sales pick back up again. So they pay this person to keep up a relationship until they need him/her back at work. They may not even pay this person his/her full rate.
Consider that while one car's sales are dwindling, another's might be picking up. Well, a person putting doors on a Chevy Malibu can probably do the same thing on a Chevy Trailblazer. In this case, the worker isn't paid to be idle, he/she just switches car lines.
Even if the worker is paid to be idle, you shouldn't blame the worker or the union. A contract requires two parties. The auto manufacturers made these agreements with the unions, knowing the consequences full well. Why blame a person for wanting nice pay and benefits?
Also, if the auto manufacturers wanted to renegotiate to save themselves, the unions would support it. In the past, the US auto manufacturers have renegotiated union contracts to cut pay. After all, what good is a union if its members have no jobs?
The Japanese do not produce a car, until they know it is needed. It took the American car companies decades to catch on, and even then labor unions prevent the auto industry from moving from human labor to machine labor, which can be cheaper than even a Chinese laborer.
We can produce cars cheaper than Japan, we just don't want to sacrifice millions of jobs doing it. Where the Japanese have found a way to move forwards. Labor unions have had such a grasp on the airlines, education, and the auto industry its no wonder that we need to consider bailing these industries out. They are the most socialist industries in the country.
If we need to save these industries, I do think we need to use government funds, but shouldn't they be economic development funds? Rather than cash that will be burned on failed employment standards?
Since there are only a few auto manufacturers and the likelihood that there's more than two in your commutable distance is low means that auto manufacturers have the power necessary to abuse their workers without unions.
However, unions became ultra-effective in many places demanding things like pay even when plants aren't used and benefits fit for a king. GM agreed to that because, at the time, the auto industry was really just Ford and GM and the unions were sticking it to Ford too and so it didn't matter so much. That's changed, but the UAW won't face the post-80s reality.
Having workers have no power is bad. Having companies have no power is bad. Having each group have equal power works pretty well.
Of course I find it interesting that if I can't make the mortgage due to circumstances I didn't predict, too bad. I can't even discharge that during personal bankruptcy anymore, it's pay the whole freight or get out.
GM entered a set of contractual obligations, didn't predict a future where they could not meet those obligations, and now wants the taxpayers to bail them out, or they get to file Chapter 11 and cut the retirees loose. Taxpayers still pay because those retirees will need more government aid and cost of care write-offs which raise health care costs for everyone else.
All this would be moot if the US health care system were not employer-based, in which case the playing field would be level already, with a big fat 0 for both firms.
I'd also like to see how the $73.73 figure is calculated. The actual wage gap between the two is about 3 bucks an hour (same link) but the total labor cost gap is more than $25 an hour. Does that include healthcare (in which case it was counted twice). If not, that's awful high. Maybe pension obligations? That's way high. Using the quick 50% of wage cost--a common HR WAG when you don't have hard numbers--Toyota should be around $40, so they are high at $48, but GM should be around $46, and they're above $73.
GM also sells a lot of cars not because they're people's primary choice, but because prices for an equivalent car are lower, or the financing is better. Considering GM is losing money per car at this point, I hardly think those lower prices are GM's choice.
My dad is a retired GM employee (33 years), and I can tell you that his base pay was about $28/hr at the end. Granted, the cost of benefits were so high that they were scared to hire too many people, so he got tons of overtime.
In fact, he averaged over 60 hours a week (and often up to 85) the last 7 years he was there (1998-2005), so his annual pay looked pretty darn good with all that time-and-a-half. He accepted a buyout to retire, even though he wasn't really ready to, and as he was leaving they already had most of the plant converted to $14/hr non-union positions.
The days of the platinum health-care for retirees are pretty much over as well. My mom just spent a week at home sick because she didn't want to spend $175 to go to the doctor. When I was growing up we could go to the doctor/hospital for free on Dad's insurance, so this was a bit of a shock to me. Sadly it seems like my $55/mo high deductible plan beats their insurance in a lot of ways.
I'm not saying all this to try and earn sympathy for my parents or blame GM. I just want to point out that it's not all roses for the 'greedy union workers and retirees' either. There has been a lot of absurd crap over the years (like the job banks that paid people to sit in a room all day), but the absurdity goes both ways. My dad has stories about them building cars that had no buyers, just to honor supplier agreements, and then storing said cars in fields until they were scrapped.
As for health care, we'd all be a lot better off if the health care system in the U.S. had some process innovations. However, there's so much bureaucratic red tape that not many people want to tackle that job.
The other things they need to do is use less labor hours to build a vehicle, increase plant utilization (which is only at 85% right now), and get idle workers off their payroll - yes GM is contractually obligated to pay people not to work.
GM should innovate. They do need to come up with better models. They do need more reliable cars. They do need to be more fuel efficient. However, none of those are really their big problem. GM is still selling nearly as many cars as Toyota. They don't have problems creating popular cars. That's a misconception with many people who happen to dislike GM cars (heck, I think they're complete crap).
The big question is, can GM reduce those labor and healthcare costs? If not, they will NEVER, EVER be profitable. You can't compete with a $2,200 handicap per vehicle. In fact, it's a testament to GM that they have been able to compete for so long with such a huge disadvantage. If those costs can be lowered, GM just needs a small loan (like $25bn) and a few years time. If those costs can't be lowered, we'll be talking about giving them another $50bn in a year and another $100bn in two years.
EDIT: Figures provided by NPR (http://www.npr.org/news/specials/gmvstoyota/)