March 29, 2007, New York Times

Chief Warns Automakers That U.A.W. Wonft Budge on Health Care or Jobs Bank

By NICK BUNKLEY

DETROIT, March 28 — Months before contract talks with Detroitfs automakers are set to begin, the United Automobile Workers union has seemingly declared two crucial issues off-limits for bargaining.

The unionfs president, Ron Gettelfinger, said on Wednesday that he saw no reason to accept any deal that requires workers to pay more of their health care costs or that eliminates the jobs bank, which allows laid-off workers to continue collecting most of their pay and benefits.

Executives at General Motors, Ford Motor and the Chrysler Group of DaimlerChrysler have complained that rising health care costs and the jobs bank hinder their ability to compete with foreign-based rivals like Toyota and Honda.

But Mr. Gettelfinger said the union had already done its part to help curb health care costs when it struck deals to let G.M. and Ford charge hourly workers for a part of their benefits. (The union later refused to grant similar concessions to Chrysler, saying its finances were better.)

gWe addressed health care in f05,h he told reporters at the end of the U.A.W.fs two-day collective bargaining convention. gYou donft get two bites at the apple, do you?h

The jobs bank was a nonissue, Mr. Gettelfinger said, because most workers assigned to it left voluntarily during the recent buyout.

Two years ago, analysts estimated there were about 12,000 people in the jobs bank, which was created in the 1980s to protect workers from being laid off as plants used more robotics in their assembly lines.

In the last year, more than 70,000 workers at G.M. and Ford took advantage of incentives of up to $140,000 to retire or quit. Together, the two companies have announced plans to eliminate 61,000 hourly jobs through next year.

David Gregory, a labor specialist at the St. Johnfs University School of Law in New York, said the mere existence of the jobs bank hurts the automakers.

gAs long as the jobs bank dynamic is there, it gives the perceptionh to Wall Street that Detroitfs business model is out of date, Mr. Gregory said.

G.M.fs chief executive, Rick Wagoner, has said he wants to re-examine the jobs bank during this summerfs contract talks — the current agreement expires in September — but has stopped short of saying the program should be eliminated.

Mr. Wagoner and his counterparts at Ford and Chrysler could seek changes, like removing language barring the automakers from moving workers in the jobs bank to positions more than 50 miles away.

A G.M. spokesman, Dan Flores, declined to comment on the automakerfs goals during the contract talks. He lauded union officials for working with G.M. to reduce expenses but said, gMore change is required to structure G.M. for sustained profitability and growth.h

Mr. Flores noted that G.M. spent $4.8 billion last year providing health care to 1.1 million employees, retirees and dependents.

gBased on the magnitude of the cost, health care will continue to be a discussion issue for G.M. and the U.A.W.,h Mr. Flores said, adding that G.M. is willing to consider ga variety of alternatives to address the health care burden.h Some experts have suggested that retiree health care costs be paid for by a union trust fund rather than by the automakers.

Mr. Gettelfinger and auto executives have said the best solution would be a national health care system; the chief executives of all three Detroit automakers raised that issue with President Bush last fall.

U.A.W. officials also said Wednesday that they had rejected the latest proposal by the Delphi Corporation, the parts supplier seeking to reduce wages and benefits as it works to emerge from bankruptcy protection.