Friday, October 21, 2005
Retirees would pay part of their premiums and deductibles for the first time.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
General Motors workers are being asked to give up about $1 an hour in future wage increases to keep down new health care costs for retirees.
The sacrifices in a new health care plan proposed by GM and the United Auto Workers are minimal, said a union official in Lordstown.
"The changes are nowhere near as bad as we expected," said Brandon Michaels, administrative assistant to the shop chairman of UAW Local 1112.
Jim Graham, local president, and Ben Strickland, shop chairman, are endorsing the plan after meeting Thursday with senior UAW leaders in Detroit, Michaels said. The UAW and GM announced the new plan Monday, but details weren't released until after Thursday's meeting.
The plan, which must be ratified by members, calls for current workers to pay higher co-payments for medicine and give up some wage increases next year.
Workers would give up 6 cents of their cost-of-living adjustments in March and June and 5 cents of a COLA in September. The amount of the quarterly COLA depends on national inflation rates.
Workers also would forgo a 3 percent wage increase scheduled for September.
The UAW said those changes amount to $1 an hour in scheduled pay increases.
In addition, workers would forgo 2 cents of future COLAs, starting in December 2006, the UAW said.
For current workers, however, GM would continue to pay the full cost of health care premiums, and there would be no deductibles.
Meanwhile, retirees would pay part of their premiums and a deductible for the first time. Coverage for single retirees would cost $10 a month, while family coverage would be $21 a month. Deductibles would be $150 for singles and $300 for a family.
Retirees also will see drug co-payments increase and new fees for certain services. A visit to an emergency room would be $50, for instance.
Michaels said these new costs would have been higher if not for the new Voluntary Employee Benefit Account that will be created. The wage increases being given up by the employees will provide money for this fund. Also, GM is making a $1 billion contribution in both 2006 and 2007.
People with GM pension earnings of less than $8,000 a year would remain on the current health care plan.
GM and the UAW are expected to visit the health care issue again during national contract negotiations in 2007.
Michaels said UAW leaders took the unusual step of bargaining changes in the middle of a contract because of the financial condition of GM.
"If GM goes down, we all go down. We all have a vested interest in keeping GM alive," he said.
Informational meetings and ratification votes by the Lordstown unions will be scheduled.
About 5,500 workers are represented by Local 1112 and Local 1714, which is based at the fabrication plant at the Lordstown complex.
GM has been pushing the UAW for concessions to bring down the automaker's health care bill, which is expected to reach $5.6 billion this year. The health care agreement will save GM $1 billion in cash annually.
GM this week reported that its North American division lost $1.6 billion in the third quarter and that the company's overall loss for the year expanded to about $3 billion.