UAW Members Ratify Agreement with Ford, Some Seek Recount
Members of United Auto Workers on Dec. 22, 2005, ratified an agreement with Ford Motor that would require union retirees to pay monthly premiums and annual deductibles for health insurance, the Wall Street Journal reports. About 51% of members voted in favor of the agreement, compared with other agreements endorsed by union leaders that often receive 80% or higher approval from members, according to the Journal. The closeness of the vote "suggests how tough it will be for [Ford] and other U.S. auto companies to get more cost-cutting measures through the union," the Journal reports. Workers at Ford assembly plants in Chicago; Dearborn, Mich.; Kansas City, Mo.; Louisville, Ky.; and St. Paul, Minn.; rejected the concessions, according to union officials (McCracken/Stoll, Wall Street Journal, 12/23/05). The agreement, which is similar to a deal with General Motors that UAW members approved in October 2005, would save Ford an estimated $850 million annually in health care costs (USA Today, 12/23/05). Ford spent $3.1 billion on health care for 550,000 active and retired hourly and salaried employees in 2004 and would spend about $3.5 billion in 2005 without the agreement.
Agreement Details
Under the agreement, retired UAW employees would pay monthly premiums of $10 for single health insurance or $21 for family coverage. They also would pay annual deductibles of $150 for individuals and $300 for families, with caps on out-of-pocket expenses of $370 for individuals and $752 for families. UAW retirees currently pay no annual deductibles. In addition, UAW retirees would make copayments of $10 for brand-name prescription drugs and $5 for generic medications. Active UAW employees would defer 17 cents of future quarterly cost-of-living raises and a 3% wage increase scheduled for September 2006 into a retiree health care fund. The deferments would amount to 99 cents per hour in wage increases, or about $2,000 annually. In addition, active employees would make higher prescription drug copays but would not pay monthly premiums or annual deductibles. Under the agreement, Ford would invest $900 million over five years in new technologies that could help preserve UAW jobs in the future. A task force that includes UAW President Ron Gettelfinger, Vice President Gerald Bantom and Ford officials will determine how to invest the $900 million. The agreement requires approval by U.S. District Court (Kaiser Daily Health Policy Report, 12/15/05).
Potential Recount, Appeal
Some UAW workers are calling for a recount, complaining about the voting process and threatening to appeal the results, the Detroit Free Press reports. UAW does not release a local-by-local tally, and UAW spokesperson Paul Krell said he would not "get into dissecting election results" (Webster, Detroit Free Press, 12/27/05). Ford Spokesperson Marcy Evans declined to comment on the vote or the possibility of an appeal but said that Ford management might answer questions about its relationship with workers in January, when detailing the company's restructuring plan (Wall Street Journal, 12/23/05).
GM Agreement Approved
In related news, Judge Robert Cleland of Federal District Court in Detroit on Dec. 22, 2005, approved UAW's agreement with GM, instructed that formal notices be sent to UAW retirees and surviving spouses, and scheduled a March 6 hearing on the agreement's fairness, the AP/New York Times reports (AP/New York Times, 12/23/05).
Some Union Workers Criticize Recent Concessions
An "increasingly vocal minority" of UAW members is questioning some of the concessions made over the past several months by Gettelfinger on workers' health benefits, the Journal reports. Critics of the health care cuts allege that Gettelfinger has readily accepted automakers' complaints of financial problems, even as auto executives continue to receive large compensation packages, according to the Journal. Gettelfinger, who is up for re-election in 2006, acknowledges that some deals reached with automakers have tested his leadership but said the concessions are preferable to a bankruptcy process in which union workers could risk losing their pensions. The controversy surrounding the recent vote on changes to union health plans at Ford "is sure to raise questions about how much more room Mr. Gettelfinger has to maneuver," particularly with a possible health care deal with the profitable DaimlerChrysler AG Chrysler Group, the Journal reports (McCracken, Wall Street Journal, 12/30/05).
