The True Costs of Legacies.(Column)

Byline: Kevin A. Wilson

I've been steeped in new domestic cars and trucks of late, and have to say that most of it is astonishing. After a few years of "pretty good,'' finally, on the newest models, fit-and-finishes approach and match those of import brands. So, too, do ride and handling and design and, in most cases, drivetrains. In many particulars, by purely objective measures (and I include here even fuel economy), the domestics have got the import brand competition matched or even beaten.

Many of you are thinking: "They've been saying that for ages. I bet they are still junk.'' And I can't argue with you, except to say that the real competition in the coming years will be on subjective matters, and your subjective impression is the biggest hurdle facing these new cars. The domestics are running the race with a ball and chain of soiled reputation around their ankles. As much as "heritage'' gives Mustang a design theme and Cadillac an aura of luxury and 300C high-performance street creds, history also puts burdens on their backs.

Of late a common phrase around Detroit is "legacy cost.'' This is a label for labor union contracts that hamper the competitiveness of domestic automakers and the troubled parts-making companies they spun off, Delphi and Visteon. Generous health insurance benefits are particularly burdensome, as is extending those benefits and others to a vast population of retirees who get costly pensions, as well.

Automakers headquartered overseas, whose employees back home are covered by national healthcare plans, have an edge there. Their U.S. transplant operations don't have union contracts to deal with, nor the long history that generates the burden of pensioners. It is the "legacy'' of such contracts and long operation that most impede Detroit's profitability, we are told.

When talking about the burdens their predecessors have laid on them, it might be ...