The health care vortex: the ailing effects of rising health care costs on the automotive industry.

The cost of health care is a topic no one can avoid, especially the American automotive companies, it is an issue at the heart of the industry's struggle to remain competitive in an increasingly global marketplace filled with aggressive rivals.

Globalization has changed everything, and

The American antomotive companies find themselves in a health care vortex of rising costs and falling production. As health care costs increase, the health care cost per vehicle naturally increases, which forces up the selling price for American vehicles. This upward pressure on vehicle prices exacerbates the competitive disadvantage being experienced by American automotive companies.

To make matters worse, the auto companies are cutting production to remain competitive against foreign competitors. Falling production is spreading the rising costs of health care over fewer and fewer vehicles. The health care costs per vehicle then increases, again pushing the selling price of American vehicles even higher. Rising health care costs, coupled with falling production, creates a vicious cycle that threatens to perpetuate the competitive disadvantage the auto industry finds itself in.

During the latest contract negotiations, the Unit Auto Workers and automotive companies courageously tackled this issue by creating the Voluntary Employee Beneficiary Association (VEBA) trusts. Under the agreement, the union will now manage the employee health care system for Chrysler, Ford and General Motors. This historic development provides health care security for all active and retired workers and will help American auto companies compete with their foreign rivals.

The unions and auto companies have begun to tackle the tough issue of rising health care costs. Our elected leaders must now act to help alleviate the crushing burden of rising health care expenses that continues to plaque American businesses.

The Detroit Regional Chamber has laid out an agenda for transforming the health care industry that includes improving access to coverage, care and choices, having consumers take more responsibility for their wellness and reducing the number of uninsured. We will continue to work with other community and business leaders, as well as our elected officials, to help ensure a vital component of the regions's, state's and nation's economy is not held back by rising costs of health care.

Tammy Carnrike is COO of the Detroit Regional Chamber.

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* Health care costs = * Health care cost per vehicle

* Production = * Health care cost per vehicle

* Health care cost per vehicle = * Selling price

* Selling price = * Global competitiveness