As General Motors boss Rick Waggoner takes charge of the company’s US factories, he should ask himself a basic question: Why bother? There’s no doubt that GM needs a tune-up. And Waggoner might be the mechanic for the job. But GM faces a bigger problem, one that tinkering with the engine is unlikely to fix – long-term solvency.
The threat to solvency comes from the company’s huge liabilities for pensions and healthcare. The big number is the
$61 billion of unfunded healthcare liabilities, of which $28 billion are on the balance sheet.
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