DETROIT, March 21 - Like other Big Three auto workers, Deborah Stewart has medical coverage that is, if not a free lunch, then close to it. No deductibles. No monthly premiums. But Ms. Stewart, who works at a sprawling General Motors complex in the shadows of the Detroit skyline, says she believes it cannot last. þþÿThey're losing money, saying they've got to make changes, and I think everybody expects that it's going to come,ÿ said Ms. Stewart, 55, referring to cuts in health care benefits. A 30-year G.M. veteran who oversees robots that attach fenders to cars, she was heading out after her shift Monday at the Detroit/Hamtramck assembly plant, which produces cars like the Buick LeSabre. ÿI think it will come,ÿ she said, ÿwithout a doubt.ÿ þþWith the decline of the domestic auto industry accelerating, the United Auto Workers union has agreed to a baby-step rollback of its vaunted ÿfirst dollarÿ health care coverage, which has long made assembly work at a Big Three automaker one of the most attractive blue-collar jobs in America. Under the coverage, workers at G.M., the Ford Motor Company and the Chrysler division of DaimlerChrysler pay no deductibles or monthly premiums. þþBut this year, the union agreed to let Chrysler start imposing the first deductibles to be paid by Big Three workers, ranging from $100 to $1,000 for workers or retirees who use preferred provider organizations, known as P.P.O.'s. Chrysler workers were informed in a letter on March 10, and the development was first reported this weekend by The Detroit News. þþWhile Chrysler will reap only modest savings from the step, and while auto workers still have coverage that is the envy of many white-collar workers, the move is deeply symbolic and a sign of the union's acknowledgment of the competitive pressures from Toyota and other foreign-based competitors. Considering that Chrysler is the healthiest of the Big Three at the moment, and that similar provisions are in all of the Big Three contracts, such arrangements are expected to follow for G.M. and Ford. þþÿIt's a precedent breaker, and it's a union that relies on precedents and agreements,ÿ said Sean P. McAlinden, director of the economics and business group at the Center for Automotive Research, an independent research firm in Ann Arbor, Mich. þþÿIf something has never been done before, it's very difficult for the union to ratify it or an official to allow it. Then once it happens, it can be blown up.ÿþþFord and G.M. would not respond when asked whether they would try to negotiate for the initial use of deductibles for P.P.O.'s. þþA G.M. spokesman, Stefan Weinmann, said, ÿwe never talk about our contract with the U.A.W.ÿþþMarci Evans, a spokeswoman for Ford, said, ÿFord and the U.A.W. continually have discussions regarding contractual provisions which would include health care,ÿ but added, in reference to DaimlerChrysler, that Ford ÿhas similar language in its collective bargaining agreement.ÿþþIn a statement Monday, Ron Gettelfinger, the union president, played down the significance of the use of deductibles, saying Big Three workers have co-pays for drugs and office visits, depending on the plan. He added that U.A.W. members in general, who include workers outside the auto industry, were not ÿimmune to the effects of rising health care costs.ÿþþPreserving the generous health care coverage of Big Three workers has been the top priority of Mr. Gettelfinger of the union. Before contract negotiations in 2003 he drew a line in the sand over health care costs, declaring at a news conference before the talks ÿwe're not going to share costs.ÿ Still, he did give some modest ground in the 2003 contract, agreeing to small increases of co-payments for prescription drugs and some doctor's visits. þþMr. McAlinden at Automotive Research said going beyond small cuts would not be easy to sell to union members, though many, like Ms. Stewart at G.M., are realistic about the depressed business climate. þþÿWhen it comes to really making a concession of health costs, it's going to be very difficult for them,ÿ he said. þþIf deductibles came to G.M., ÿobviously, everybody would be upset,ÿ said Craig A. Nothnagel, a G.M. worker and the president of union Local 22 in Detroit. þþÿNobody wants to give up any money if they don't have to, but I believe the membership is educated enough and understands enough what's going on around us, with this world economy we were forced into, that things are changing for all of us,ÿ he said. þþIn the arrangement with Chrysler, the company invoked a little-known provision of its labor contract that allows for a revamping of some aspects of its health care agreements if costs accelerate. Since costs at P.P.O.'s used by the company have recently surpassed those of traditional fee-for-service health plans, Chrysler and the union considered a number of options but agreed to a $100 to $1,000 deductible for workers and retirees who want to remain in P.P.O.'s. þþOf the 390,000 Americans covered by Chrysler, about 35,000 blue-collar workers and retirees, and their family members, use P.P.O.'s. The company expects to reap savings in the low tens of millions of dollars on its annual $2 billion health care bill. þþÿIt's a drop in the bucket next to $2 billion, but at the same time it's a significant step and certainly indicates that the U.A.W. has their eye on the same issue,ÿ said David Elshoff, a spokesman for Chrysler. þþSince the 2003 contract was negotiated, Chrysler has been the one member of the Big Three to show signs of a turnaround. Both G.M. and Ford have continued to see a sharp erosion of their customer base, but G.M.'s sales and financial erosion has been particularly steep. The company held about a quarter of the United States market in February, down from 33 percent a decade ago, and its stock hit a more than 10-year low last week after it announced that it would report two consecutive quarters of losses. þþG.M. also plans to produce 10 percent fewer vehicles in the first half of the year than it did a year ago. And as it has for the last half-decade, it continues to cut white-collar jobs through buyouts and early retirement packages at a pace of 1,000 to 2,000 workers annually. þþG.M. is meeting next month with union leaders to discuss its current financial situation, including health care costs. þþA substantial part of G.M.'s problem - but hardly the only issue - is that it is supporting about two and a half retirees for every worker. With health care costs more than $5 billion a year - and about $1,400 on a vehicle produced in the United States - many G.M. workers are expecting that long-cherished benefits could be pared back. þþÿI really don't think that it should come out of our pocket, but it's getting to that point,ÿ said Rhonda West, 37, a rare recent G.M. hire at the Detroit/Hamtramck plant. þþMike Wakely, 49, a production supervisor at the plant who is worried about cuts to salaried benefits, said, ÿI fully expect to pay some share of my health care somewhere down the road. Would I like it? No. Would I understand it? Yes. It's not 1950 anymore and there's no longer just three auto companies in the world.ÿþþ
Source: NY Times