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April 14, 2005

USA: GM and UAW annual meeting to focus on healthcare costs

GM and the United Auto Workers (UAW) are meeting, as part of an annual meeting timetable, to discuss the sensitive issue of spiralling healthcare costs and the extent to which workers should pay a higher share of them.

GM and the United Auto Workers (UAW) are meeting, as part of an annual meeting timetable, to discuss the sensitive issue of spiralling healthcare costs and the extent to which workers should pay a higher share of them.

Several hundred GM and UAW officials are convening Thursday in the Detroit suburb of Dearborn, including UAW President Ron Gettelfinger and top GM executives.

The meeting comes at a particularly difficult time for GM, which cited rising healthcare expenses when it lowered its earnings outlook last month. The world’s largest automaker spent $5.2 billion last year to cover 1.1 million salaried and hourly employees, retirees and family members, Reuters said. GM has said that could grow to $5.8 billion this year.

GM executives have said recently the company should adopt a health care plan that provides the same benefits for salaried and hourly workers. GM’s salaried workers pay 27 percent of their total health care costs, while the company’s UAW-covered hourly workers pay 7 percent, according to GM. The average U.S. corporate employee pays 32 percent of the cost of healthcare, GM said.

Tommy Thompson, former U.S. Secretary of Health and Human Services, is also speaking on the subject on Friday at the Detroit Regional Chamber. The US Big Three automakers spent $10 billion for medical expenses in 2004. This was more than the companies spent on steel.


Fast Stats: US Healthcare Crisis
   * Spending on healthcare is expected to grow to $1.9 trillion this year, an increase of $621 billion from 2000 (Source:  Boston University School of Public Health)
   * U.S. health spending per person is twice the average of other industrialized countries including Canada and countries in Europe (Source:  Boston University School of Public Health)
   * 57% of business executives rate health care costs the number one concern for their companies (Source:  Society for Human Resource Management study)
   * 30% of Americans are having trouble paying other bills because of rising health care costs (2004 Health Confidence Survey)
   * 18% of Americans are having trouble paying for food, heat, and housing     because of increased health care costs (2004 Health Confidence Survey).

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