Automakers Could Get Health Care Assistance for Increased Fuel Efficiency
Sen. Barack Obama (D-Ill.) proposed at a speech last week to a panel at the National Governors Association conference that the federal government pay some of the Big Three U.S. automakers' health care costs in exchange for their agreeing to manufacture cars that get higher gasoline mileage, the Miami Herald reports.
According to the Herald, the proposal "features a traditional liberal's approach of government help for a troubled blue-collar industry and environmental conservation, but it adds a requirement that the industry meet a performance standard in exchange," and it might "signal a shift toward the political center."
Obama called the proposal "win-win ... for the industry."
Linda Stuntz, a former deputy energy secretary under former President George H.W. Bush, said the proposal "brings together some important elements." She said, "I think the auto industry is ready and would like some help on these sort of things. ... We're not just going to make it a handout; we've got to get something in return."
Ford Motor spokesperson Mike Moran said, "We look forward to working with the senator in finding solutions" (Borenstein, Miami Herald, 3/5).
General Motors on Monday will present a case in U.S. District Court that a federal judge should accept a plan to shift some health care costs to hourly retirees in an effort to reduce the company's costs by $1 billion per year, the Detroit News reports. GM last year reached a deal with United Auto Workers to reduce health care spending, but UAW cannot bargain on behalf of hourly retirees, so GM and the union are "seeking rare court approval to prevent any legal challenges," according to the News.
Under the agreement, retired hourly workers would start paying monthly contributions, deductibles and co-payments for medical services up to a maximum of $370 per year for individuals and $752 for families. Because retirees are expected to oppose the deal, GM "has laid out the gravity of the growing health care crisis in sworn statements by senior executives," the News reports.
The company said in a recent court filing, "Without significant reductions in this growing (health care) liability, GM's future -- and its continued ability to fund even reduced health care benefits -- is at serious risk" (Shepardson, Detroit News, 3/6).