Mon Jul 13, 2015 2:33pm EDT
UAW, Detroit Three could revise healthcare packages in talks: WSJ
Healthcare packages and profit-sharing
agreements could be revised in talks for new contracts between the United Auto
Workers (UAW) and the Big Three U.S. automakers, the Wall Street Journal
reported, citing people familiar with the negotiations.
Healthcare costs will be a central issue in the talks, scheduled to begin on
Monday, as the automakers face a so-called "Cadillac tax" of 40 percent on rich
UAW medical plans starting in 2018.
Fiat Chrysler (FCHA.MI) (FCAU.N),
one of the top three U.S. automakers, is looking to retool the compensation
systems completely, the Journal reported. (on.wsj.com/1HApJ4o)
"Those are just two of many issues that we will be discussing with the UAW
during this round of negotiations," Fiat Chrysler spokeswoman Jodi Tinson told
Reuters.
Fiat has a much higher percentage of lower-paid, entry-level workers than
General Motors (GM.N) and Ford Motor Co (F.N), according to a study of 2014 labor costs by the
Center for Automotive Research. Fiat's U.S. worker costs averaged $48 per hour
compared with $57 for Ford and $58 for GM last year.
"From General Motor's perspective we can say healthcare and profit sharing
are two important areas of both the business and employee benefits," GM
spokesman Peter Ternes said in an email to Reuters. "However, we've agreed with
the UAW to not negotiate these subjects in the press."
UAW's current contracts expire on Sept. 14. The talks will focus on narrowing
the gap between veteran workers, who make about $28 per hour, and employees
hired since 2011 with a "second tier" hourly wage of $16-$19.
"We look forward to discussing many different options with our UAW partners
that will allow us to have a fair and competitive labor agreement and to provide
jobs and investment here in the U.S.," Ford spokeswoman Kristina Adamski said in
an email.
(Reporting by Ankush Sharma and Sagarika
Jaisinghani in Bengaluru; Editing by Gopakumar Warrier and Kirti
Pandey)