Combined, GM, Ford and the DaimlerChrysler AG's Chrysler Group estimate they spent $9.9 billion in 2003 to provide health care to nearly 2 million workers, pensioners and dependents, reports Jeffrey McCracken in the Detroit Free Press.

GM had the biggest healthcare costs in 2003 by far at $4.8 billion and expects that to grow about 8% to $5.1 billion this year. Overall, the health costs faced by Ford, GM and Chrysler are rising from 8% to 12% a year.

The figures were aired at a seminar during this year’s annual Management Briefings at Traverse City, Michigan, where the theme was "surviving the perfect storm," and health care was frequently cited as the one of the US automotive industry’s highest risk factors.

According to Mark Finucane, a speaker at the conference who oversees Ernst & Young's US health care practice, "Health care threatens the long-term future of the auto industry, if not all manufacturers in America." He and others noted GM and its two Detroit rivals spend more on health care than they do on steel, at GM on average about $1,400 per vehicle, according to various studies, versus about $650-$700 for steel per vehicle.

Rising health-care costs are blamed for everything from why Wall Street doesn't want to invest in auto-related stocks to why domestic automakers cheapen their interiors with more plastic than foreign rivals.

In one session, Michigan's director of economic development, David Hollister, blamed rising health-care costs for hurting funding for vocational and higher education, thereby jeopardizing the state's ability to offer educated workers to automakers and suppliers.