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The UAW will work within its pact to cut costs, says President Ron Gettelfinger, right, with Vice President Richard Shoemaker.UAW won't reopen GM contract
But union is willing to seek health care cost cuts within the current agreement.
Dave Moore
Yield on health benefits?
Should United Auto Workers President Ron Gettelfinger give in to GM's demands for cuts in UAW workers' health care benefits?
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DEARBORN -- The head of the United Auto Workers said the union won't reopen its national contract with General Motors Corp. but is willing to help the automaker cut health care and other costs.
"As long as we work within the framework of our agreement, we'll make joint efforts to lower costs wherever it's possible," UAW President Ron Gettelfinger said Thursday. "But we're going to stay within the confines of the agreement."
Gettelfinger said GM has not asked to reopen negotiations on the national agreement, which expires in September 2007.
His comments followed an annual meeting between GM and union officials at the Hyatt Regency Hotel in Dearborn.
About 500 local and national UAW leaders and top GM executives attended the four-and-a-half hour, closed-door session.
GM stock fell 6 percent to a 12-year low after Wall Street absorbed the news that no clear plan to cut health care and other costs emerged from the session.
GM Chairman and CEO Rick Wagoner attended the meeting but didn't speak to reporters afterward. John Buttermore, GM's vice president for North American labor relations, wouldn't comment on the possibility of reopening the labor contract but said the amount GM can save by working within the contract is limited.
"Within the agreement, there's a lot we can do, but there's also a lot we need," Buttermore said. "We're looking at all options."
Buttermore added that GM will continue meeting weekly with the union to discuss options.
"There's a very strong sense of urgency for us to be able to communicate and put together a plan we need for the business," he said.
During the session, Wagoner, along with GM's top financial officer, John Devine, and Gary Cowger, head of manufacturing and labor relations, outlined the automaker's financial situation.
GM is expected to report an $847 million first quarter loss next week. Through March, the automaker's U.S. market share has sunk to 25.6 percent and sales are down 5.1 percent, according to Autodata Corp. The automaker plans to reduce its salaried work force by as many as 2,000 this year through attrition and early buyouts, and is cutting its European work force by at least 12,000 as part of a restructuring plan on that continent aimed at saving GM about $665 million a year.
Dave Moore, shop chairman at UAW Local 653 in Pontiac, said Wagoner repeated his ongoing call for government assistance in lowering health care costs.
GM has said it expects to spend about $5.6 billion on health care this year, an increase of $400 million over last year. No American company has a higher health care bill.
Health care expenses account for $1,600 of the cost to build a typical GM vehicle, putting the automaker at a cost disadvantage against foreign rivals with smaller, younger workforces and fewer retirees.
In a speech Thursday night before the Society of Automotive Engineers World Congress in Detroit, Wagoner said, "Escalating health care costs are a huge issue that needs to be promptly and comprehensively addressed before it drives more jobs from the U.S."
Last week, Wagoner took control of GM's North American operations, freeing former GM North America president Cowger to work on global labor and management issues. Earlier this year, Cowger visited the governors of 13 states to lobby for help in cutting health care costs, among other things.
At last month's New York auto show, Cowger and Bob Lutz, GM's vice chairman for global product development, suggested union-represented hourly employees should share the same, less generous, health care benefits as salaried employees.
Last year, GM's 119,000 hourly workers paid 7 percent of their health care costs, while its 38,000 U.S. salaried workers footed about 27 percent of their costs.
When asked Thursday if benefits for hourly and salaried workers should be the same, UAW vice president Richard Shoemaker, who heads the union's GM unit, cracked, "If they'd like to give the salaried employees our plan we'd be more than happy to share it with them."
Sean McAlinden, an economist and labor expert with the Center for Automotive Research in Ann Arbor, estimates GM would save as much as $1.4 billion if UAW members were covered under the same health care plans as nonunion salaried workers.
Gettelfinger has already shown his willingness to work with Detroit's automakers as they battle thinning profits and market share losses to Asian and European competition.
The current contract, for example, calls for GM to hire one union worker for every two who quit or retire. But since 2003, the UAW has allowed GM to cut its hourly workforce by more than 6,000 employees without demanding new hires. By this summer, GM will have closed its Baltimore, Md., assembly plant and permanently idled assembly plants in Lansing and Linden, N.J.
The union also allowed DaimlerChrysler AG's Chrysler Group to exercise a longstanding provision of its national labor contract to require some UAW-represented workers and retirees to pay annual deductibles for health care for the first time.
Still, McAlinden said that even with GM's expected first quarter loss, and its warning that 2005 profits will be as much as 80 percent lower than its initial guidance, GM is not in a position to expect major concessions from the UAW.
"They haven't taken a big enough hit," McAlinden said. "How about two quarters of losses, then we'll talk about big concessions."
Roy Nievierowski, president of Local 362 in Bay City, where GM builds powertrain components, was among the UAW officials who listened to GM's presentation. After the meeting, as he sat behind the wheel of his Chevy S10 pickup with the vanity plate "UAW4EVR," Nievierowski expressed confidence that his members won't suffer because of GM's woes.
"They basically told us one thing," he said, "not to worry."
Kevin Johnson, vice president of Local 909, described the meeting's atmosphere as cordial, with no hint of confrontation.
"I heard exactly," he said, "what I expected to hear."
The Associated Press contributed to this report. You can reach Ed Garsten at (313) 223-3217 or egarsten@detnews.com.
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