legacy cost

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Legacy Cost

Ongoing costs to a company that come from funding activities that, by definition, do not increase revenue. Perhaps the most prominent example of legacy costs is the funding of pension plans. Legacy costs often accrue when a company takes on too many responsibilities in times of strong performance or when it takes on an appropriate level of responsibility and then its priorities change. Critics of legacy costs contend that they make industry uncompetitive, while proponents, notably labor unions, argue they are part of an employer's moral obligation to its employees.

legacy cost

The financial expense of supporting retiree benefits, including pensions, heath care, and insurance. Legacy cost is especially burdensome for mature companies with declining markets and a shrinking labor force.
References in periodicals archive ?
In the auto industry, for example, where legacy costs for health care and pensions in manufacturing one car exceed real labor costs, the U.S.
Additionally, mergers and bankruptcy plans are reducing legacy costs for integrated mills, lessening the disadvantage that these companies have been operating under relative to EAF mills and giving them more flexibility.
In saloon form, the Legacy costs from pounds 15,750 to pounds 16,750 and that's an absolute bargain.
This major component of legacy costs will continue to escalate at a time when car prices, in real terms, are declining.
As a part of this process, Dole will evaluate the clearing of any legacy costs and liabilities remaining with the company.
Will West Virginia pick up the tab for unfunded legacy costs, such as retirees and their dependents?
Kelly said that under his direction, PSCU would be more open to transparency than it might have been in the past, and member credit unions would find it easier to examine their card programs for unintended or legacy costs and fees.
The OPG advantage resides in its lean business model which does not carry accumulated overhead and legacy costs that most of the large orthopedic companies must include in their inventory COG (cost of goods) and pricing strategies.
"The Big Three have eliminated so many legacy costs that I am more confident than ever that they will be competitive with any automaker anywhere in the world," McElroy said.
Some $17.4 billion in taxpayer bailout dollars and untold billions more in capital, labor and productivity have been sacrificed in the name of propping up companies clearly unable to outrun their legacy costs in today's market.