Healthcare Blog

Big Three Companies Competing To Become Lead Negotiator In UAW Contract Negotiations

September 30, 2017

Detroit's Big Three automakers -- Ford Motor, General Motors and Chrysler Group -- are "competing intensely" to become the lead contract negotiator with United Auto Workers as the Sept. 14 expiration of the current agreement draws near, the Detroit News reports (Vlasic, Detroit News, 8/29).

Ford and GM last week officially asked UAW to assume responsibility for the health care benefits of more than 1.5 million working and retired employees. Under the arrangement, the companies would transfer retiree health care obligations to an independent trust fund, or voluntary employee beneficiary association, that the union would manage. Such a request was largely anticipated and would free the automakers from future obligations. The contract negotiations began last month (Kaiser Daily Health Policy Report, 8/24).

According to the News, Ford is in "prime position" to head up the negotiations because it "already has successfully negotiated local union operating agreements at many of its U.S. plants." GM has been "pushing the hardest among the automakers for major changes in how it funds health care for its union workers and retirees," according to the News. Therefore, one person close to the negotiations said GM could be chosen as lead negotiator because it would test whether UAW members would support a VEBA.

In addition, GM is in the best financial position, and it had success negotiating employee buyouts and early retirements in 2006 and compromises on retiree health care in 2005. "I think the odds-on favorite is Ford, but it well could be GM," Harley Shaiken, a UAW expert at the University of California-Berkeley, said, adding, "Chrysler is the less likely choice." Chrysler, which earlier this year was sold to Cerberus Capital Management, also is looking to establish a VEBA.

Sources close to the union say leaders soon will gauge the progress of negotiations and decide whether a lead negotiator among the automakers will be chosen. Another option is that no lead will be selected and parallel talks would continue to take place, which occurred in 2003. The News reports that the health care elements in the new contract might "make it difficult to negotiate all three deals at the same time" (Detroit News, 8/29).

Reprinted with kind permission from kaisernetwork. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at kaisernetwork/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork, a free service of The Henry J. Kaiser Family Foundation© 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.