AFSCME 3357-HOF'S BLOG

GM Health Insurance Cuts Imminent?

Apparently the collective bargaining agreement between the UAW and GM gives GM some authority to cut, but either GM wants more OR the boundaries of the authority are ambiguous.

How do the rank & file members feel about this? From the Detroit News article linked below:

Some UAW members said they don't support any reduction of health care coverage. "Don't touch it," said Robert Johnson, a member of UAW Local 652 who works at GM's Lansing Grand River Cadillac plant. "I don't want to compromise on anything."

Johnson, a GM employee for 27 years, said he'd rather see a program like legal services cut. But Bill Price, who has been placed in GM's "jobs bank" now that his production job has been cut, said he'd "be willing to pay $20 for an office visit. What's good for GM is good for us."

Here are some more tidbits:

GM wants to close the gap in health coverage between its 111,000 U.S. hourly workers and 39,000 salaried workers. Hourly employees pay 7 percent of their annual health care costs, on average, while salaried workers kick in 27 percent.

By instituting health care parity among all employees, GM "could save $2,500 per person and $300 million (per year) overall," Rod Lache, an analyst who follows the auto industry for Deutsche Bank, said in a report released Monday. "Unfortunately this equates to less than one year's health care inflation."

Union leaders are urging that health care benefits for retirees should not be touched, although the potential savings could be significant. About 1.2 million people, including 340,000 UAW retirees, are covered by GM health care coverage. Almost half of the automaker's active hourly work force will be eligible to retire within the next five years.

Half of the hourly work force can retire within 5 years? How can GM ever shrink itself to profitability with those numbers?

Note the 20% increase in health care costs shifted to the workers gains $300 million to GM's bottom line. Here's the problem: That's only a tenth of the savings they need. Where are they going to get the other 90%?

In our parochial interest: I don't think legal service benefits are in any immediate jeopardy. We are relatively cheap, no more than $.07 per hour. Moreover, some of that is recovered in productivity when whe deal with things the employee would otherwise have to deal with. Nevertheless, at the next contract renegotiation, all bets are off.



UAW: GM health cutbacks imminent - 06/14/05