The United Auto Workers has granted Ford Motor Co. and General Motors Corp. concessions on the healthcare benefits for union workers, albeit reluctantly. But when it comes to DaimlerChrysler, the signals for a deal on healthcare are altogether more ambiguous.
Both Dieter Zetsche,
DaimlerChrysler chief executive, and Tom LaSorda, Chrysler Group CEO, have
indicated they are confident the union is prepared to approve healthcare
concessions similar to those already delivered to GM and Ford.
However, UAW president Ron
Gettelfinger, who likes to say the devil is in the details, is a master at
drawing out negotiations, particularly when there is no advantage to the union
in a quick settlement. He has noted there are subtle differences in the
so-called pattern contracts at DaimlerChrysler, General Motors and Ford. For one
thing, going back to the concessions days in the early 1980s, Chrysler always
had an escape clause that allowed the company to shift some costs in some plans
to employees if the company's overall bill increased too quickly, which it did
Gettelfinger noted recently that the union had already adjusted healthcare plans
at Chrysler. Gettelfinger also said the concessions, while painful for the
union, were necessary because of
“It was a long year,” Gettelfinger
said in a speech to the Automotive News World Congress. “It was probably one of
the most painful, excruciating decisions that we ever had to deal with as a
On the other hand, Chrysler's
market share was up 5 percent. Nevertheless, Gettelfinger said the same team
that studied Ford and GM's finances is currently reviewing Chrysler's records to
determine if concessions are needed. In addition, Nate Gooden, the head of the
UAW's DaimlerChrysler department, has told local union leaders that UAW is
honor-bound to discuss concessions with Chrysler.
Even if the UAW does negotiate the
additional healthcare changes with Chrysler, it may not be able to get them
The union's DaimlerChrysler
council was divided on the issue in November and anti-concession sentiment among
local union officers remains strong.
Sean McAlinden, director of
research at the Center For Automotive Research in Ann Arbor, also noted that a
large number of incumbent officers—nearly 70 percent—were defeated in local
elections for union officers representing Chrysler workers. A number of
large defeats of incumbent UAW officers generally is a sign of dissatisfaction
within the union's ranks, he added.
In addition, the concessions
barely passed at Ford where the opposition was weak and scattered, though
the opponents did manage to generate a lively "Vote No" campaign on the
Internet. The vote on concessions at the Chrysler could quickly escalate into an
all-out internal scrimmage with opponents contesting the security of every
ballot box and every local vote count.
Overall the concessions are the
most significant made by the union in more than two decades and will save Ford
$850 million and GM nearly $1 billion in the years to come. They will
require GM and Ford workers to defer a $1-per-hour wage increase next
September and cover larger co-payments for prescription drugs out of their own
Ford and GM retirees also will
have to pay a portion of their health insurance premiums for the first time.
Total out-of-pocket expenses for retirees with dependents are capped at $752 per
year, pending settlement of a federal lawsuit that was filed to pre-empt claims
from irate workers.
GM, which is expected to lose more than $4 billion this year, asked for the concessions on health provisions last spring. The runaway cost of healthcare was undermining the giant automaker's competitive position, GM executives said.