GM is weighed down by heavy "legacy costs" for pensions and health care, while Toyota has no pension plan, and its health care costs per vehicle are barely a tenth of GM's

Against Toyota, GM Needs to Mind the Gap

Auto racing isn't about just the car and the driver. If you've got to haul around a ton of stuff and the other guy doesn't, it's hard to be competitive.

For years now, we've heard General Motors complain that it's being lapped in the United States by Toyota because it's got five retirees in the back seat for every two people actively building its vehicles, while Toyota's U.S. operations are virtually retiree-free. GM is weighed down by heavy "legacy costs" for pensions and health care, while Toyota has no pension plan, and its health care costs per vehicle are barely a tenth of GM's.


GM's Mark LaNeve says the automaker is trying to close the pricing gap it has with Toyota.
GM's Mark LaNeve says the automaker is trying to close the pricing gap it has with Toyota. (By Paul Sancya -- Associated Press)
About This Column

Sloan's Newsweek column appears in The Washington Post on Tuesdays. He focuses on corporate issues that include how deals are structured and excesses by corporations.

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But it's not quite that simple, race fans. GM has another serious performance drag that has nothing to do with legacies. It has to do with price. Because GM vehicles aren't as attractive to buyers as comparable Toyotas, you can generally buy them cheaper.