GM

There was a time in the US when tariffs could have benefited the country. The big auto companies led by GM were unionized and had defined pension benefit plans. In 1980 these plans were enhanced to include the 30 year and out feature. This meant you could start at age 18 and received retirement benefits at age 48. By the time Japanese imports became popular in the 1980’s, GM had 210,000 retirees that was costing about $1,500 per car. By 2003 that number had risen to 460,000. Toyota came to the US and built non union plants with no retirement cost because it would be many years before any of their employees were eligible for retirement. Their plants were new and more efficient meaning more productive so their profits were higher. This was the time the company could afford a tariff and make for more fair competition with American companies. These retirement costs were a major factor in the 2009 GM bankruptcy. For many the Toyota’s were a better-quality car which was a management failure at GM.