I'm getting a lot of comments claiming that the real problem is the lack of universal health care in the US. How can GM and Ford possibly compete with German and Japanese companies whose employee healthcare is paid for by the government?
Well, you're right, they can't. That's because there are no German or Japanese auto companies whose employee healthcare is paid for by the government. Both countries have a government-regulated system of employer-provided healthcare.
Moreover, this ignores the fact that insofar as health care is the fundamental problem here, the problem is with retiree health care, not health care for current workers. In other words, with people who are already mostly covered by America's universal healthcare system, Medicare.
Why have the Big Three provided extremely expensive health benefits for retirees for decades, when there was a really very generous government program available? Because that's what the union wanted, and it had enough muscle to get it. Unless you actually do as Canada has done, and make private health plans illegal, there is nothing in a system of universal health care that prevents employees from asking for more generous benefits than the government provides. Which means that moving to universal health care will do exactly nothing. If the union can extract value in the form of expensive health benefits, it can extract that value in the form of cash, job security promises, beefier pension funds, or whatever it thinks the membership wants most.