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Talks with UAW over retiree health care costs crucial for survival of GM, Ford, Chrysler.
By Chris Isidore, CNNMoney.com senior writer
In part:
NEW YORK (CNNMoney.com) -- The survival of brands like Chevrolet, Ford and Chrysler could very well depend on whether the United Auto Workers union is willing to assume a $100 billion headache.
As crucial labor talks get underway between the union and the three major U.S. automakers, there is a widespread assumption among industry experts that the automakers will need to cut their labor costs by nearly a third, or roughly $20 an hour, if they're going to be able to stem huge losses in their core North American auto operations and compete with nonunion rivals like Toyota Motor and Honda Motor.
Pay cuts aren't likely to be the answer, especially since pay of about $28 an hour for UAW members is not much out of line with what the Asian automakers are paying hourly workers at their U.S. plants. Rather, it's the promises of health care to retirees and their dependents that's seen as the crux of the problem.
For example, GM has 432,000 retirees but only about 80,000 active UAW members at the end of last year - less than a third of the hourly U.S. work force it had in 1994. Union ranks at GM have fallen further this year due to buyouts. Between them the three U.S. automakers have less than 160,000 UAW members on staff heading into these talks
Guess we'll see what happens in the next couple months....
By Chris Isidore, CNNMoney.com senior writer
In part:
NEW YORK (CNNMoney.com) -- The survival of brands like Chevrolet, Ford and Chrysler could very well depend on whether the United Auto Workers union is willing to assume a $100 billion headache.
As crucial labor talks get underway between the union and the three major U.S. automakers, there is a widespread assumption among industry experts that the automakers will need to cut their labor costs by nearly a third, or roughly $20 an hour, if they're going to be able to stem huge losses in their core North American auto operations and compete with nonunion rivals like Toyota Motor and Honda Motor.
Pay cuts aren't likely to be the answer, especially since pay of about $28 an hour for UAW members is not much out of line with what the Asian automakers are paying hourly workers at their U.S. plants. Rather, it's the promises of health care to retirees and their dependents that's seen as the crux of the problem.
For example, GM has 432,000 retirees but only about 80,000 active UAW members at the end of last year - less than a third of the hourly U.S. work force it had in 1994. Union ranks at GM have fallen further this year due to buyouts. Between them the three U.S. automakers have less than 160,000 UAW members on staff heading into these talks
Guess we'll see what happens in the next couple months....
