Chrysler's Top Executives To Pay Up To 100% Of Health Premiums; Salaried Workers Pay Increased Share

March 16, 2006
The Chrysler Group announced on March 16 that it is making changes to its health care payment structures for executives and management. "We all have to do our part going forward," said Chrysler Group president and Chief Executive Officer Tom LaSorda. ...

The Chrysler Group announced on March 16 that it is making changes to its health care payment structures for executives and management.

"We all have to do our part going forward," said Chrysler Group president and Chief Executive Officer Tom LaSorda. "And we have to do it in a way that is innovative, competitive, equitable and provides a long-term solution. Our solution addresses the need to be competitive and recognizes that, while employees need to pay more for their health care, cost increases should be borne equitably, based on an employee's ability to pay," he explained.

The new plan calls for the top executives to be responsible for up to 100% of their health care premiums in 2007. The average executive will contribute an additional $1,500 while mid-managers will see an increase of $450, according to a statement issued by the company.

Chrysler Group's health care costs have risen 100% since 2002, with the average annual total health care cost for each salaried Chrysler Group employee, regardless of job or income level is about $11,000. Of that total, the average salaried employee pays about 27% of that cost, or roughly $3,000 per year in pre-tax premiums, co-pays and deductibles to their service provider. On average, that means Chrysler Group is spending about $8,000 per salaried employee for health care. Under the new structure salaried employees will now be responsible for 31% of their health care costs.

"Chrysler Group must continue to drive down health care costs in order to sustain our profitable growth in a market that is intensely competitive," added LaSorda. "The market will not allow car makers to raise vehicle prices to absorb these additional expenses. Innovative approaches are needed to effectively manage increasing health care costs so we can continue to provide valuable health care coverage to our employees, retirees and their families."

Chrysler Group today also announced changes to health care benefits for pre- and post-age 65 retirees.

Popular Sponsored Recommendations

Empowering the Modern Workforce: The Power of Connected Worker Technologies

March 1, 2024
Explore real-world strategies to boost worker safety, collaboration, training, and productivity in manufacturing. Emphasizing Industry 4.0, we'll discuss digitalization and automation...

3 Best Practices to Create a Product-Centric Competitive Advantage with PRO.FILE PLM

Jan. 25, 2024
Gain insight on best practices and strategies you need to accelerate engineering change management and reduce time to market. Register now for your opportunity to accelerate your...

Transformative Capabilities for XaaS Models in Manufacturing

Feb. 14, 2024
The manufacturing sector is undergoing a pivotal shift toward "servitization," or enhancing product offerings with services and embracing a subscription model. This transition...

Shifting Your Business from Products to Service-Based Business Models: Generating Predictable Revenues

Oct. 27, 2023
Executive summary on a recent IndustryWeek-hosted webinar sponsored by SAP

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!