The U.S. companies still pay workers most of their salaries when they are laid off, and they still in many cases pay UAW wages and benefits for janitorial, landscaping and cafeteria workers, items that Japanese automakers contract out for less money, Merkle said.
"The market just isn't going to support inefficiencies. Either the UAW, they can pick up health care and they can help GM out here, or they can let the market take care of things later," Merkle said. "When the market corrects the situation, it's going to be brutal. It's a bankruptcy situation."
GM, which has about 540,000 UAW retirees and spouses, badly wants to pay the union to form VEBA and get the health care liabilities off its books. The UAW is seeking guarantees of new vehicles to be built in U.S.