USA Today Examines Role of Health Benefits in Contract Negotiations
USA Today examines the role of health benefits in the "closely scrutinized" contract negotiations between the United Auto Workers and the Big Three auto manufacturers -- General Motors, Ford and Chrysler (Kiley, USA Today, 8/6). The Big Three on July 16 began negotiations with UAW, and the companies will likely ask union members to pay more for health benefits. According to Mercer Human Resource Consulting, the Big Three spend more than $9,000 on health care per active worker per year, compared to an average of $5,758 at other large U.S. companies. Many U.S. industries have shifted a larger share of health care costs to employees, but most union members at the Big Three make copayments of $10 or less for physician visits and prescription drugs and have full coverage for other medical services (Hakim, New York
Times, 7/15). The Big Three must "come to grips with skyrocketing benefit costs, particularly for health care," but union negotiators have said that they will strike if an automaker "tries to cut deeply into health benefits," according to USA Today. Union leaders in the next few weeks will decide whether to begin detailed negotiations with GM, Ford or Chrysler; benefit and pay agreements reached in those negotiations will likely "set the agenda" for negotiations with the other two companies, USA Today reports. Health care cost issues would likely have the largest role in negotiations with GM, which "is choking on benefits for its retirees," USA Today reports. John Buttermore, chief negotiator for GM, said, "Never before in the history of our industry have we faced such a threat" as health care expenditures. However, UAW President Ron Gettelfinger said that union members "aren't going to give any health care benefits back" (USA Today, 8/6).