Health Care Fund Could Offer Big 3 Relief
Without question, America’s three automakers — GM, Ford, and Chrysler — are saddled with a financial burden not felt by competing automakers in the form of health care costs. Some reports say that GM’s cost for building a car are inflated by $1500 per vehicle, such is the weight that this multi-billion dollar annually obligation extracts from the company.
Although the automakers have brought their case before a reluctant federal government, the chances of finding relief this way are considered slim. With a possible overhaul in health care management years away, the automakers do not have the time or luxury to wait for government assistance.
Word is that the three automakers are exploring a way to pull together to fund the health care costs of United Auto Worker retirees. According to a published report, the three automakers are in preliminary discussions to come up with a way to contain costs. For GM this is particularly good news as the automaker shelled out $12 billion for insurance coverage in 2006, an amount that has slightly exceeded their recent deep losses.
Whatever plan is developed, the UAW will have say in how it is administered — in the past the UAW has been very reluctant to accept a reduction in health care benefits, but if the three automakers can’t pay the bills, then bankruptcy will likely force the UAW’s hand.
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