UAW Shows "Flexibility"

UAW President Ron Gettelfinger said on a Detroit radio program on Monday he is considering offering some health care concessions to Chrysler, now that the company is posting losses. Gettelfinger said, "We've been talking to Chrysler quite frequently -- we do need to find a way to fix the problem there now that Chrysler is in a downward mode."

Detroit News reports

While the UAW has historically fought to preserve top-tier health benefits for retirees, the union has shown some flexibility in light of the severe financial issues facing Detroit's automakers.

Gettelfinger is looking for a deal similar to that offered to Ford Motor and General Motors back in 2005, which were posting high enough losses to warrant the reduction in health care benefits.

The deal required GM and Ford retirees to accept modest co-pays and deductibles, while active UAW employees gave up $1 an hour in raises.

Personally, this doesn't sound like such a big deal, considering Chrysler is in the red, although I admit I have NO idea how much autoworkers earn. If the reduction in benefits amounts to increased competitiveness with foreign imports, that would be a good thing, in turn perhaps keeping a greater number of workers employed in the long-run.

I think retirees are going to be screwed though. If you're promised one thing when you retire, and then a couple of years down the road it changes, it doesn't give you proper time to adjust your budgeting. Gettelfinger does seem particularly concerned about this, which is good. I personally think retirement benefits will go by the wayside in favor of 401(k)s, it's just going to be a painful phasing out.

**Closing quote from Troy Clarke, GM's North America's chief: "If there is a cost that keeps me up at night, it's health care. We have the retiree health care issues and it's very stressful. We've got to come at that some way.

More coverage from the Associated Press.

More coverage from the Detroit Free Press.