Video: GM, UAW debate health care

By Anne Thompson Chief environmental correspondent
NBC News
updated 7/11/2005 7:44:25 PM ET 2005-07-11T23:44:25

To dig itself out of a billion-dollar hole, General Motors is about to drive eye- catching vehicles like the Pontiac Solstice and Chevy HHR into showrooms, while offering dramatic discounts to move out the ones that haven't been igniting customer excitement.

Still unresolved is how to tame GM's rising health care bill, projected at $5.6 billion this year. GM wants concessions from the United Auto Workers (UAW), but Monday union President Ron Gettelfinger said he is not convinced.

“To say that General Motors is in a crisis mode today, when they have $20 billion in cash reserves, when they're paying shareholders dividends,” explains Gettelfinger, “I'm not sure that that's the right term that anyone would want to use.”

The UAW has what is by any measure the Cadillac of health care plans — members pay no premiums and a maximum $10 co-pay for prescription drugs.

Those benefits have made Jerry Allen's family in Parma, Ohio, a GM family for three generations — and the retiree doesn't want things to change.

“If they take a little today,” says Allen, “Six months on down the road they'll get a little bit more, a little bit more. Where does it end?”

With its very reason for being now at stake, analysts say the UAW is at a crossroads — faced with diminishing its crown jewel health benefits or further burdening the company that supplies the jobs.

Robert Bruno is a labor relations expert with the University of Illinois in Chicago.

“I strongly feel,” insists Bruno, “that given the importance of health care to the UAW, this is a seminal moment in its history and for the labor movement nationwide.”

Gettelfinger agrees this is a crucial time for the union. It's reviewing GM's books but thinks the turnaround depends not on stripping benefits but on building more appealing vehicles.

“We simply believe that market share is the key,” says Gettelfinger, “and that's where we need to be focusing.”

Both sides believe they are trying to find the right route to a stronger General Motors.

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