Auto: Are Health Cuts Inevitable?

Executives at the Big Three auto companies are campaigning hard to convince their workers to accept health care concessions. Management wants the United Auto Workers to open contracts and take cuts so that the companies can reduce costs and thus regain market share and profits.

UAW members, who have enjoyed good pay and benefits compared to most blue-collar workers, are wondering where the ax will fall next.

An April 9 meeting of members determined to oppose concessions, held in Detroit and sponsored by the UAW Solidarity Coalition, attracted activists from St. Louis, Buffalo, Grand Rapids, Kalamazoo, Lansing, Flint, and Anderson, Indiana. In recent years UAW reformers’ numbers have been small. Veterans were heartened by the sight of new faces from GM, Ford, DaimlerChrysler, and smaller companies.


In late March the UAW announced health care changes for DaimlerChrysler workers, allowed under the existing contract, that will increase out-of-pocket costs for many. It was the second time the company had increased costs.

In January the union signed a contract at Caterpillar that imposed heavy premiums, co-pays, and deductibles on retirees, although Cat is making record profits. Management claimed that new premiums for current workers and a drastic two-tiered wage-and-benefits set-up for new-hires were necessary to pay the remainder of retirees’ health costs.

At agricultural equipment manufacturer CNH, workers ended a four-month lockout in March by accepting hefty premiums and co-insurance. The longtime right to retire with full pension and health care after 30 years is no more; those who retire before 55 will never be eligible for health care. A third, no-grow-in tier of health benefits was added for current workers.

At an April 14 meeting of UAW officials and GM execs, UAW President Ron Gettelfinger said he would not reopen the contract but would save the company as much money as possible within it. “The UAW has already made several adjustments along the way,” he told reporters. At different companies, these include increasing co-pays and restricting choice of providers.

In auto’s hometown, the Big Three are getting plenty of help with their public relations campaign for concessions. The Detroit News ran three polls in one week asking readers whether UAW members should give up benefits. (Check one: “[Cuts] are overdue.” “The benefits still outclass other industries.” “[Cuts] are unfair to workers.”) The daily newspapers regularly quote UAW members who see givebacks as inevitable.


Tim Kaminski of Local 110 at a St. Louis DaimlerChrysler plant said that co-workers organized an April 6 parking-lot rally to protest health plan changes imposed in his area. “We asked the local for union leave for two of us to go up to Detroit for this meeting,” said Kaminski. “When the guys found out the local wouldn’t give it, they took up a collection to pay for our gas.

“People are mad because they feel the International lied when they said they saved health care.”



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When Gettelfinger negotiated the 2003 contracts, which run till 2007, he said that he was drawing a line in the sand on health care. Union leaders assured members before ratification that the contracts delivered “no cost-shifting or benefit reductions.”

Kaminski’s co-worker Kirk Kinnear is campaigning to get fellow workers to send letters about health care to Gettelfinger in a concerted fashion.

At the meeting, Toniya Young, working under a two-tier contract at a former GM plant in Indiana, described the tensions between higher- and lower-paid workers in her plant. Young said, “When you’re a two-tier person, you never get over that emotionally. You feel you’re second-class to the company and second-class to the union.”

The group resolved to oppose any contract reopening or concessions, set up a “no concessions” website, produce leaflets addressing various aspects of the health care situation, and distribute buttons and stickers that say “Don’t Let ‘em Drain Our Contract.” They will organize a conference in the fall.


The dissidents agree with Gettelfinger on one question: Gettelfinger says frequently that the health care question can’t be solved at the bargaining table but only by Congress, with a national health care plan. He has not rallied members to pressure Congress or to join any such movement, however.

The group meeting in Detroit said they would make a national health plan part of their agitation within the UAW. Recognizing that their benefits are still, for now, better than many Americans’, they want the union to make common cause with the uninsured. They will also tell Gettelfinger to demand that Big Three execs form a public committee to pressure Congress for a national health plan.

Members pointed out that both American and Japanese auto companies are locating in Ontario precisely because Canada’s “single-payer” health care makes costs much lower there.

Meanwhile, UAW leaders are already quietly making concessions to help General Motors’ bottom line.

The union’s touted job-security provisions have been spottily enforced at best. This year, union officials allowed the company not to hire about 6,600 workers the union was owed under the contract, and said this would save GM more money than health care cuts. GM says hourly jobs have dropped by 12,000 since the contract was signed in September 2003.

The International has also been aggressively enforcing on DaimlerChrysler locals new “team concept” contract language that gives the company more flexibility to add work and cut jobs.