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Health Care Could Be Big Sticking Point Between UAW and Big Three

“We’re focused on jobs,” contends UAW’s King.

by on Jul.07, 2011

UAW Pres. Bob King. Will the union make concessions on health care in order to win more jobs?

Steadily rising health-care costs will again become a key issue when the United Auto Workers begins contract talks with General Motors, Ford Motor Co. and Chrysler Group later this month.

Critics of the Obama administration’s 2009 bailout of General Motors and Chrysler Group have complained the union’s health-care benefits went through bankruptcy with only modest modifications – despite the union’s agreement, in 2007, to shift responsibility for retiree health care to independent trusts or Voluntary Employee Benefit Associations for each company.

Union members still pay less than 10% of their health-care bills through co-payments and deductibles. In the face of steadily rising health-care costs, so if the two sides win up with no change in the current formula it will represent the equivalent of a pay increase for union members.

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But that is something the carmakers insist they cannot accept as they struggle to hold total wage and benefits costs to around $50 an hour, roughly on par with the major transplant assembly lines operated by Toyota, Honda and Nissan.

Along with the cost-of-living increases now abandoned by the UAW, rising health care costs helped drive Detroit’s Big Three labor costs from about $47 an hour in 1999 to more than $76 by 2006 – before concessions began driving costs back down again.


Ford Motor Company offers UAW More Jobs

Small, but symbolic step is peace offering to union, which refuses to match GM, Chrysler bankruptcy concessions.

by on Aug.04, 2010

Ford's decision to skip a federal bailout certainly hasn't hurt sales but left the balance sheet weak.

Ford Motor Company will bring in-house by 2012 about 1,975 hourly jobs that would have been performed by suppliers inside and outside of the U.S. , the number two Detroit maker said this morning.

Ford said it can add what will be United Auto Workers spots into Ford’s U.S. plants thanks to “collaboration with the union” to make its plants more competitive and efficient through modern labor agreements.

Translation: Ford has started hiring some workers again at $14 an hour, half of the rate previously, under a new “two-tier” wage system agreed to in 2007.

Industry observers remain concerned about Ford’s balance sheet, which is carrying more than $25 billion in debt that wasn’t wiped out because it did not declare bankruptcy last year when GM and Chrysler did so.

Job Creation?

“The name of the game is competitiveness, and our UAW partners have found new ways of working together on labor agreements that allow us to bring jobs back to Ford plants and back to America,” said Mark Fields, president of The Americas, who is speaking today at the Center for Automotive Research Management Briefing Seminars in Traverse City.