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April 15, 2005

USA: UAW won’t re-open GM contract to lower healthcare costs

United Auto Workers officials have indicated that they'd be unwilling to reopen the union's two-year-old labour contract with General Motors Corp. to negotiate lower health care costs, according to the Associated Press (AP).

United Auto Workers officials have indicated that they’d be unwilling to reopen the union’s two-year-old labour contract with General Motors Corp. to negotiate lower health care costs, according to The Associated Press (AP).

UAW president Ron Gettelfinger reportedly said after an annual meeting between GM and the union that the automaker hasn’t asked the union to reopen the contract, but he added the UAW believes it can work with GM, which recently slashed its earnings forecasts, to lower costs within the current contract.

“We’re very comfortable with where we’re at,” Gettelfinger told AP. “As long as we work within the framework of our agreement, we’ll make joint efforts to lower costs wherever it’s possible, whether it pertains to health care or whether it pertains to other measures. But we’re going to stay within the confines of the agreement.”

The Associated Press noted that the comments came even as GM shares fell to their lowest level in more than a decade, a sign that investors lack confidence in the automaker’s ability to face its health care obligations and other problems – GM shares lost $US1.67, or 5.8%, to close at $26.66 in trading on Thursday on the New York Stock Exchange – the lowest level since 1991.

John Buttermore, GM’s vice president for North American labour relations, reportedly wouldn’t comment on the possibility of reopening the contract but said the amount GM can save by working within the contract is limited.

“Within the agreement, there’s a lot we can do, but there’s also a lot we need,” Buttermore told AP, adding: “We’re looking at all options.”

Buttermore reportedly added GM would continue meeting weekly with the union to discuss various options.

The contract last was negotiated in 2003 and expires in 2007, AP noted.

According to The Associated Press , GM spent $5.2 billion last year to cover 1.1 million salaried and hourly employees, retirees and family members – GM has said the amount could grow to $5.8 billion this year.

The news agency noted that two top GM executives – product development chief Bob Lutz and manufacturing chief Gary Cowger – 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% of their total health care costs, while the company’s UAW -covered hourly workers pay 7%, and the average US corporate employee pays 32% of the cost of health care.

Gettelfinger reportedly repeated his call for a national health care system, which he said would be the best thing for employers as well as the millions of Americans without medical coverage.

“There’s definitely a need to do something on the national level about health care,” he told The Associated Press , adding: “We simply believe health care should be a right and not a privilege.”

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