U.S. Automakers And UAW Tackle Health Care Costs

GM, looking to trim its health care costs by $2 billion over two years, is turning to the UAW for help. Ford and DaimlerChrysler AG's Detroit-based Chrysler Group have said they will seek the same relief if GM comes away from its talks with a competitive advantage. General Motors Corp. alone is facing a 2005 health care bill of about $5.6 billion to cover more than one million workers, retirees and their families.

But the UAW isn't backing down. "The UAW's faced crossroads several times," said John Revitte, a labor studies professor at Michigan State University. "But this one is certainly very significant."

As more U.S. companies trim their employee benefit plans -- a recent study by human resources consultancy Towers-Perrin showed 45% of the nations' automotive suppliers have eliminated the benefits they pay their retirees -- more pressure is brought to bear on the UAW.

Despite a 4.8% increase in the number of names on its rolls last year, the long-term trend line for UAW membership is downward - from 1.5 million in the late 1970s, to 654,657 in 2004. But UAW President Ron Gettelfinger is undeterred. When GM suggested it could unilaterally cut the benefits paid to its hourly retirees and surviving spouses, Gettelfinger stopped just short of promising a strike, warning instead that such a move would be "a huge mistake." He said that the union would explore ways to help GM reduce the cost of its health care obligations, but it will not change its contract with the company.

"We're not the guys getting on charter planes and have a home here and a home there," Gettelfinger said, echoing UAW members who have expressed outrage with the seven-figure bonuses being paid to executives at troubled Delphi Corp. and Visteon Corp. -- primary suppliers to GM and Ford Motor Co. -- respectively.

The UAW has already made concessions to help those companies stay afloat, and Delphi -- which recently revised its earnings downward to correct an accounting problem -- is asking for more. "We just want to earn a living and educate our kids," Gettelfinger said in a recent interview. "And what about their jobs? Are their jobs going to be there? Those are the types of issues that we need to be focusing on."

Copyright Agence France-Presse, 2005

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