Chrysler Shifts Healthcare Burden, Will Rest Of Big Three Follow?

By: Beth Shayne
By: Beth Shayne

It's no secret the automotive world struggles to cut costs, and one of the largest increases of late is health care.

General Motors announced Wednesday they don't expected to meet projected profit levels this year. Meantime, GM competitor -- Daimler Chrysler's put a whole new cost cutting idea on the table with health care at its center.

"Logically, they might come after us as well," says Tony Totty, UAW Local 1618 negotiator.

Citing health care costs that have spiraled out of control, Chrysler's made a move, beginning April 1st, to require deductibles and co-pays for healthcare that was previously free under their agreement with the UAW workers.

According to the Detroit News, it's expected to save them tens of millions of dollars. General Motors has repeated cited health care costs as a primary reason the company's struggling, and so the union wouldn't be surprised to see GM ask the same of them.

"Those coverages--we deserve them. We put our lives on the line," says Local 602 Vice President Doug Rademacher.

For now, its just gossip. Nothing has happened or even been discussed with local union leaders.

UAW GM workers pay about 7% of their benefits. They acknowledge its an exceptional working contract.

They also understand the challenge. "I don't see my corporation go under with the burden of healthcare costs," says Frank Benson, Local 659 in Flint.

Still, he says they have to find a different way. He puts his foot down on this concession.

But, It's not clear if healthcare is a concession GM UAW could make right now. It requires re-negotiating a contract that's not up until 2007.

Chrysler used an obscure clause from their union contract agreed on in 1982 to make their change, and Local 602 President Art Luna says he's doesn't know of a GM clause like that one.

"My concern is not putting fear in the membership," Luna says.

Luna says UAW presidents and chairmen are scheduled to meet with General Motors CEO Rick Wagoner on issues like this one next month, and it's very possible this idea could come up in an effort to save jobs. His hope though, getting the Big Three on board for political change, lobbying together for national health care.


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