AUTO INDUSTRY GM, Ford may devise new health care pact

They seek a plan like Chrysler's to save millions of dollars.
DETROIT (AP) -- General Motors Corp. and Ford Motor Co., the nation's two largest automakers, are reviewing their health care costs with the United Auto Workers and may follow smaller rival Chrysler Group in negotiating a new health care contract with the union, the UAW said Monday.
Chrysler says its new health care pact with the UAW will save it tens of millions of dollars annually.
The agreement, which goes into effect April 1, requires about 35,000 Chrysler hourly workers and retirees to pay annual deductibles of between $100 and $1,000 for health care that previously had been free.
The change covers Chrysler workers in the company's preferred provider plans, or PPOs, but not the 75,000 hourly employees covered by the company's traditional health care plan or the 32,000 enrolled in HMOs. Those plans will continue to require no deductible, Chrysler said.
Costs negotiable
Chrysler's contract with the UAW allows the automaker to negotiate new terms if the cost of PPOs rises above the cost of the traditional plan.
"We clearly recognize rising health care costs are a serious problem for working families and many of their employers," UAW President Ron Gettelfinger said Monday in a statement.
GM and Ford have had similar clauses in their contracts since 1982, Gettelfinger said, so they may try to adopt the same change. Neither automaker would say Monday whether they're actively pursuing the change.
"We don't comment on the specifics of our contract language, but GM has been working with the UAW to improve the quality and reduce the cost of health care plans," GM spokesman Robert Herta said.
GM and the UAW are scheduled to meet April 14 to discuss health care and other parts of the labor contract, which was last negotiated in 2003 and expires in 2007.
Ford spokeswoman Marcey Evans said Ford and the UAW "continually have discussions regarding contractual provisions, and that would include health care."
GM, Ford and Chrysler spent $10 billion on medical expenses last year, and costs continue to climb.
GM faces problems
GM, in particular, has been struggling with flagging U.S. sales and high health care costs. The world's largest automaker spent $5.2 billion last year to cover 1.1 million salaried and hourly employees, retirees and family members.
As part of an ongoing effort, GM expects to eliminate between 1,000 and 2,000 salaried jobs this year through an early retirement program, Herta said. It also has delayed plans for a new line of rear-wheel-drive cars scheduled for 2008 so it can bring its trucks and sport utility vehicles to market faster.
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