Ford, GM: Big 3 health care pool on table – The Detroit News
Ford Motor Co. and General Motors Co., facing a midnight Sept. 14 contract deadline, are considering a proposal floated by the United Auto Workers to create a health care co-op that pools together active workers from all three Detroit automakers.
“We’re discussing it and we’ll see where it goes, but again, it’s way too early,” Ford Motor Co. Executive Chairman Bill Ford said during a charity event Wednesday marking the 10th anniversary of the Ford Volunteer Corp.
GM spokeswoman Katie McBride confirmed that the automaker also is discussing the health care co-op concept in its separate talks with the union.
“The pressures of rising health care costs require collaboration to find creative solutions,” McBride said in an emailed statement. “GM is committed to working with our UAW partners to explore ways we can continue delivering benefits employees value while improving the long-term competitiveness of the company.”
Fiat Chrysler Automobiles NV declined to directly confirm that its contract negotiators are looking at the health care proposal. Spokeswoman Jodi Tinson said: “As the cost of health care continues to increase at an unsustainable rate, FCA US is open to discussing with the UAW options that will reduce cost while both improving the quality of care and the health of our employees.”
UAW President Dennis Williams first floated the idea publicly in June at the union’s Solidarity House headquarters in Detroit. The Detroit News first reported last month that an active worker health care pool was more than an idea, and was one option being pushed by the UAW as they sent their demands to automakers.
A co-op would pool all active salaried and hourly workers to help reduce automakers’ rising health care costs, give them leverage against the health-insurance companies and maintain benefits for members in the future — similar to what the Voluntary Employee Beneficiary Association, or VEBA, does for the current 860,000 UAW retirees and dependents.
“I’ve walked through this several ways; I just don’t have any other answer,” Williams told The News last month. “I do believe this will work. It’s worked with the VEBA.”
Labor expert Art Schwartz, a longtime GM negotiator who is not involved in talks this year, said confirmation from Ford and GM should not necessarily be interpreted as an indication the health-care pool concept will be part of any tentative agreement.
“I don’t think you can really read anything into what Bill Ford said,” said Schwartz, who is president of Ann Arbor-based Labor and Economics Associates.
Ford added he “feels great” about how discussions are going. Unlike past negotiations, little has been leaked about this year’s talks — a tone bargainers on both sides credit to Williams and his bargaining style.
In just the past four years, outlays for health care have grown 45 percent for Ford and 77 percent for FCA. Automaker spending on health care for hourly workers and their families likely will top $2 billion this year.
Ford says its health care costs for hourly employees are about $800 million this year, up from $550 million in 2011. FCA says it will pay $615 million this year, compared to $347 million in 2011. GM reportedly spent $665 million on health care for hourly employees and families in 2011. The automaker will not say what its current spending is, but has said increases are “on par” with Ford and FCA.
The co-op system pitched by the union would be a shared responsibility among the UAW and automakers, but driven by union leaders increasingly interested in helping to manage ballooning health care costs and their members’ welfare. The union doesn’t expect the pool would cost workers or the companies more.
A pooled system also could help automakers avoid the Affordable Care Act’s so-called Cadillac Tax, which starting in 2018 imposes a 40 percent excise tax on the portion of group health insurance premiums that exceed $10,200 for single coverage and $27,500 for family coverage.
Bill Ford was in Inkster on Wednesday to announce two initiatives for his Ford Volunteer Corps. The “Bill Ford Better World Challenge” will award $500,000 yearly to community service projects identified by company employees. Ford is contributing $250,000 to the grant, and $250,000 will be matched by the automaker.
Under the “Thirty Under 30” initiative, Ford will select 30 employees younger than 30 for a yearlong course to learn civic engagement and leadership skills.
In its 10 years, the Volunteer Corps has completed 1 million hours of community service, finishing 9,000 projects in 40 countries.
“This is what I’m most proud of,” Ford said. “It’s what we really stand for as a company.”