GM agreements with UAW on health care costs could help end strike, injure Ford
Tamara Sullivan, a GM paint plant worker, talks about the UAW strike and union solidarity.
Eric Seals, Detroit Free Press
General Motors, in his negotiations with the UAW, has cost Ford a lot of money.
Why? Ford employs the most temporary workers in the United States and, as a result, pays more for health care. So all the costs that GM negotiates in what is seen as a main contract with the Detroit Three, Ford directly disproportionately affects, labor analysts say.
The upside of being the target chosen by the union to go first during collective bargaining means the GM set is the pattern for important issues such as salaries, health care and temporary workers in the four-year contract.
Initially, GM proposed increasing the proportion of health care costs that hourly workers pay from 3% to 15%, but the UAW screamed no way. The union claimed that for years, workers have admitted salary increases and other benefits to protect the health care costs of workers in physically demanding jobs. GM has said that they have agreed to leave the health costs as they are, a big gain for the union.
The Autoworker Insurance Agreement is among the best left in the country. The average worker now pays 28% of health care costs, says the Center for Automotive Research.
"Health care is a big issue," said Marick Masters, a business professor at Wayne State University who specializes in work management. "It is sacrosanct for UAW. Any company that tries to make a significant change to the health care system to shift the costs of its employees invites strikes. ”
While GM employs most people in the United States among Detroit Three, Ford has the most American hourly workers of any car manufacturer, foreign-owned or domestic. UAW represents 46,000 GM workers, 55,400 Ford workers and 47,400 Fiat Chrysler workers, according to the company's websites.
Each company makes billions in profits. All told before the contract talks that costs must be included and health care was a high priority. Comparison employees pay much more in comparison. At GM, 33%. At Ford 30%. At FCA, 35%.
Temporary workers make up 7% to 10% of GM's workforce over a year, accounting for about 4,100 workers by the end of 2018. Ford had about 3,400 employees at year-end, and Fiat Chrysler Automobiles had 4,800, UAW said. Temporary workers have no vision or dental benefits and have deductibles.
Ford and FCA include temporary agents in their official hourly work. GM does not include posters in the posting posted on the company's website. They are separate and that is why there are sometimes discrepancies in GM strikers' totals.
& # 39; More Competitive & # 39;
GM enters Week 5 of a national strike in 10 states. After the agreement is ratified, the union will focus on completing an agreement with the other two Detroit companies.
Responding to the likelihood of unchanged health care costs, Ford spokeswoman Kelli Felker said: "We are focused on reaching a fair deal with the UAW that allows Ford to be more competitive, so we can continue to preserve and protect well-paid producing jobs and sustaining our results in investing in our US plants. "
While companies can tweak the contract to tailor it to their needs, departing too much from the master's strike threat.
"There are often changes after the pattern is set because" pattern "does not mean three identical contracts, but it does transfer basic principles," said Professor Harley Shaiken, an expert in teaching at the University of California, Berkeley. "Health care is a critical issue. I think you will see something similar to what is happening at GM. And it certainly affects Ford."
"They start far apart and move toward the center and hope that's where both sides can live with it, "said Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research." But not all issues are cut down the middle. Collective bargaining is the art of making compromises. And compromise means you don't get what you want, but you get what you need. "
Aside from wages, health care is the biggest and most burdensome cost," Dziczek said.
"Car manufacturers estimate using around one Billion dollars a year on employee health care, "not including retirees, she said." Cost increases are beyond anyone's control. And despite being major purchasers of health care, companies do not have enough sway to move the market – to have pricing power or control over rising costs. "
With health care a top priority of the union and seen as untouchable, it leaves less money for companies to negotiate other things, industry observers noted.
"They can gain greater pay and other benefits if they do not dedicate so much of the negotiating power to having no change in health care," Dziczek said. [19659005] But one very important thing to remember, she said, is that each company has different pain points. For example, Fiat Chrysler has a larger proportion of temporary workers than the other two. So changes to that policy will affect the FCA more, since it pays most workers $ 15-19 for the hour with fewer benefits.
The FCA also has a larger proportion of permanent production workers hired after 2007, called "in-progress", meaning they earned around $ 17 an hour to start, growing to $ 28 an hour after eight years. UAW has said they will condense that timeline.
So-called "legacy workers", people hired before 2007, earn $ 28-33 an hour. Skilled industries, about 15% of the Detroit Three workforce, earn $ 35-36 per hour plus overtime.
September 15, approximately 46,000 GM UAW members went on strike throughout the country after GM made an offer to the union two hours before 2015 The contract expired at midnight on September 14. The talks continue.
Health care costs have been identified as a matter of concern for many years.
Since 2007, car manufacturers have spent money studying how to improve results in health care and reduce costs, but the changes have been limited. [19659005] "This is an emotional benefit," said Dz iczek. "People don't want to see any change."
But some simple changes may still be part of the package that was negotiated in 2019. Small actions, such as making sure a family has a medical treatment instead of just going to the emergency room, can make a huge difference in costs. And active management of chronic conditions related to diabetes, asthma or heart health can save millions.
"You will get better results and save costs," Dziczek said, wondering what kind of small changes that might be part of a tentative deal apart from cost share. "We do not know."
Joe Krapohl, 64, from Otisville has spent more than 30 years working at GM as a He is a third generation employee on the strike line outside the Flint Assembly Plant.
Phoebe Wall Howard, Detroit Free Press
Not & # 39; cookie cutter & # 39;
Every little change has the potential to free up money that workers want for other things.
And any changes at the federal level cannot be implemented until the next UAW contract expires in 2023, Dziczek noted.
Most foreign carmakers have rated Detroit 3 salaries and benefits UAW countries set nationally, but in recent years some non-car manufacturers have shifted to setting salaries based on regional market prices, analysts noted. They cite a delicious 2006 Toyota note that discussed necessary pay cuts and suggested hiring more temporary workers to replace $ 25 hour workers at Toyota facilities in North America.
Protection of health care costs can be used to organize foreign-based autoworkers in foreign companies in the future, predicted Masters. So this is a key strategy for UAW if it is to increase production membership.
Temp workers can go years with lower pay and fewer benefits, doing the same job that someone paid almost twice as much. This has been a starting point for UAW members.
"All these questions, it's about the nuance, and both sides benefit from pattern negotiations, salaries and healthcare and everything," Dziczek said. "Patterns are never a cookie cutter."
She emphasized, "Anything that increases labor costs in the United States will disproportionately affect Ford." Ford instead of GM because Ford was seen as a friendly dealer who would be less likely to fight. Plant closures that, in the UAW's view, violated the union contract, and perceived arrogance from CEO Mary Barra, made GM a simple target driven by anger.
Contact Phoebe Wall Howard at 3 13-222-6512 or phoward@freepress.com . Follow her on Twitter @phoebesaid . Read more at Ford and sign up for our car newsletter .
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