The United Auto Workers union told local leaders Thursday that it won't reopen its contract with General Motors Corp. before 2007 but may ask workers to shoulder more of the troubled automaker's health care costs, according to several people who attended the meeting.
"We're trying to help this corporation as best we can," said Al Coven, president of UAW Local 699, which represents a Delphi steering plant in Saginaw, Mich. "GM has been good to me. It isn't going to bother me one bit if I have to pay more for my health care."
The meeting came two days after GM chairman and CEO Rick Wagoner told shareholders that the company wants to close plants and eliminate 25,000 manufacturing jobs by 2008. Wagoner's comments weren't part of Thursday's agenda, although they were on union members' minds.
"Everybody's worried about their jobs," said Oscar Bunch, president of UAW Local 14 in Toledo, Ohio.
UAW vice president Richard Shoemaker, the chief GM negotiator, discussed GM's health care costs but didn't talk about any specific plans to cut costs, Bunch and others said. More than 100 union leaders attended the meeting.
Shoemaker said that he has told GM management that the UAW won't reopen its contract before it expires in 2007, said Linda Blaine-Motter of UAW Local 909 in Warren, Mich.
But Shoemaker indicated the union will work within the contract to lower costs, she said.
There is precedent for such agreements. Chrysler Corp. and the UAW recently negotiated a new health care pact without reopening their contract. The agreement requires around 35,000 Chrysler hourly workers and retirees to start paying deductibles of between $100 and $1,000 for health care that previously was free.
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.
UAW-covered hourly workers pay 7 percent of their total health care costs, according to GM. Salaried employees pay 27 percent, while the average U.S. corporate employee pays 32 percent, GM says.
The world's largest automaker reported a $1.1 billion loss in the first quarter, and its U.S. market share fell to 25.4 percent in the first five months of the year, down from 27 percent a year ago.
Bunch said union members need to take seriously the threat that GM could cut retirees' health care benefits or declare bankruptcy.
"What people don't realize is that GM has to have 28 percent of the market share to pay their bills," Bunch said.