Gettelfinger says uaw chrysler need to fix health care concerns

В рубриках: Automobile | Автор: admin 06.08.2011

Gettelfinger Says Uaw, Chrysler Need to Fix Health Care Concerns

United Auto Workers (UAW) President Ron Gettelfinger said last Monday that the union must find a way to give Chrysler health care concessions, similar to those given to General Motors Corp. and Ford Motor Co. in 2005.

“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,” Gettelfinger said in an interview on WJR-AM in Detroit. Like the K&N filters, the concessions have to sift partiality between automakers and their workers.

A couple of years ago, the UAW gave health care concessions to Ford and GM that saved the companies billions of dollars. Nonetheless, the union declined to grant the same deal to Chrysler because of its stable financial condition at the time. Collectively, the U.S.-based automakers have over $100 billion in long-term retiree health care costs that analysts say must be slashed.

Chrysler’s German parent, DaimlerChrysler AG, earlier announced that it would sell a controlling stake of its American operations to private equity firm Cerberus Capital Management LP. Analysts in the industry said that Cerberus likely will demand deeper concessions from the union than Daimler would have. Cerberus has said that it will leave the negotiations to Chrysler officials, led by Chrysler Group President Tom LaSorda. “I’m pleased to say discussions I’ve had with (Cerberus)… have been very professional,” Gettelfinger said. “They have a lot of confidence in Tom LaSorda…. They have confidence in the process that has been established.”

In 2005, the Chrysler made $1.8 billion, but the company was badly hurt by the rising gasoline prices and the shift of the market to small fuel-efficient cars. To note, gas prices rose to around $3 per gallon. In 2006, the Auburn Hills-based automaker said it lost $618 million and $1.98 billion before interest and taxes in the first quarter of this year.

Gettelfinger said in March that the UAW had finished a review of Chrysler’s finances to determine if the concessions are warranted. But he would not state the outcome of the review. Gettelfinger’s comments on Monday acknowledge that Chrysler has a problem that needs to be addressed. UAW spokesman Roger Kerson and Chrysler spokeswoman Michele Tinson would not comment beyond Gettelfinger’s remarks.

Both the UAW and Chrysler have been negotiating on the health care concessions in advance of national contract talks with the Detroit Big Three that are scheduled to formally start in July. But so far, no health care agreement has been agreed upon.

Under UAW’s 2005 agreement with GM, hourly workers would contribute $1 per hour in future pay increases to a new fund to help pay for retirees’ health coverage. Single retirees would pay up to $370 a year in deductibles and fees for their coverage. And most retirees and all active hourly workers would contribute higher co-payments for their prescription drugs.

Under the deal with Ford, retired autoworkers would start paying monthly contributions, yearly deductibles and co-payments for some medical services up to a maximum of $370 a year for individuals and $752 for a family. Hourly workers have no deductibles or monthly contributions, but they must contribute part of their future wage raises to a trust for future health care expenses.

Analysts noted that while Chrysler was profitable, it was unlikely that any health care concession agreement would be approved by UAW members. But since the situation has changed, a vote may come out differently.

Cerberus has said that it will leave the negotiations to Chrysler officials, led by Chrysler Group President Tom LaSorda. This is done despite the fact that Cerberus already has executives inside Chrysler’s headquarters.

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