caterpillar first year h/c cost -- $100 million

[Butthead]

http://www.chicagobreakingbusiness.com/2010/03/caterpillar-health-care-bill-would-cost-it-100m.html

[wallypiper]

To put that in perspective, they made $577 million profit on $32 billion in gross revenues in '09.

[Butthead]

yup, so 17% off the bottom line. but in reality they will have to drop their insurance to the fed, which is exactly what the fed wants.

[MrBlah]

they really must hate their employee's if they don't give them any coverage now

the retail world is gonna get hit a lot worse, walmart insures more than most, if that dont say something, I dont know what does

[Dan43]

they really must hate their employee's if they don't give them any coverage now

the retail world is gonna get hit a lot worse, walmart insures more than most, if that dont say something, I dont know what doesCat did not say they do not offer health care now. They said that the new plan would increase their current costs by 100 million.

[MrBlah]

Cat did not say they do not offer health care now. They said that the new plan would increase their current costs by 100 million.

our news reporters suck, and make it hard to find out exactly what they said, but I found this..

Folley pointed to an expansion of Medicare taxes and mandated insurance coverage as two provisions that would do the most damage.

[Phatmax]

The company I work for not only has "cadillac plans" for us serfs, but relies heavily on the GROWTH of the healthcare industry. With the vast numbers of doctor's saying they will quit practicing and the fact that if .gov takes over, growth will slow to a crawl....

Really puts the company I work for and the 2000 some employees at risk for their jobs. Wouldn't that be GREAT? Trillions of tax dollars spent and BECAUSE of that , more taxpayers gone.... Bigger spending, less money to spend.

Makes a lot of sense.....

[impalanar]

our news reporters suck, and make it hard to find out exactly what they said, but I found this..

Mandated coverage is one of the reasons insurance costs what it does. My wife and I don't need pregnancy insurance or alcohol and substance abuse insurance, but we pay for them.

[02ep3]

Has anyone published the actual letter yet? I can't seem to find it.

Total wages for Cat for 2009, 7,416M. they've got 43K of 94K employees in the US, which i expect that the US employees are paid comparably higher than the 27K in Asia/latin america. And perhaps less than the 23K they have in Europe. So washing that out, the US makes up at least 50% of the comp expense, probalby more like 60 to 70%. So on the low end, $100M is a 2.6% to 2% increase on the high end in total comp and benefits.

What they do mention about the healthcare reform is that they would be impacted significantly by the legislation ending the tax deductable status of the subsidies they receive from the goverment on Medicare Part D coverage. So who is to say how much of this 100M impact is due to the ending of this subsidy and how much is from higher actual costs of delivering healthcare coverage (I believe Cat is self insured).

To be sure, a 2% increase in comp and benefits is an impact that must be reckoned with. But who is to say it would not have increased that much YoY anyway without healthcare legislation? Costs have been going up for the healthcare system as a whole for some time now. Cat over the past 3 years has been downsizing their US headcount in favor of Asia. Much of this is probably driven by the economic growth in China as opposed to the rest of the world (they have a greater demand for heavy machinary). Certainly we can expect more Cat employees being cut in the US and sent to China with OR without healthcare legislation.

[02ep3]

...oh. and the 100M is a one-time non-cash charge to earnings. 100M is still 100M, which sucks of course. But it's not like it's 100M a year increase.

I wonder what stopping the subsidy for retiree prescription benefits would be? Would it cause Cat to drop the benefits to their retirees forcing them to wait to qualify for medicare part D? I dunno...

[wallypiper]

I'm not doubting you, but can you provide a link to the source of your information. All I can find is dozens of links to the same DJ story and it doesn't say that. It just says a 20% increase in cost and $100M in the first year.

[02ep3]

absolutely. You can view their 2009 10K off EDGAR
http://www.sec.gov/edgar.shtml

you can find all the figures on headcount, wage expenses and their discussion of the Healthcare bill in the MD&A section.

Here's a WSJ article from the other day that goes into more of the details.

http://online.wsj.com/article/BT-CO-20100319-712530.html?mod=WSJ_latestheadlines