The UAW's Health-Care Dreams

Union has best health care in the world, wants better.

Shikha Dalmia | August 3, 2007

It is not within the power of United Auto Workers President Ron Gettelfinger to save GM, Ford and Chrysler. But it is certainly within his power to kill them. Whether he chooses to do so will soon become clear. What are arguably the most critical contract negotiations in the history of Motown's auto industry began this week.

America's former Big Three auto makers are teetering on the brink of bankruptcy—Ford's second-quarter profit notwithstanding. And one big reason for their dire state, apart from collective amnesia over how to make hit cars, is their ever-escalating health-care expenses. Every car they produce, they plaintively assert, contains $1,500 in health costs that their Japanese competitors don't face.

But Mr. Gettelfinger has already declared that he is not in a "concessionary mood." UAW workers at Ford and GM agreed to a health-care cost-sharing deal during an unusual round of mid-contract negotiations in 2005. Closing the competition gap with Japanese auto makers now, Mr. Gettelfinger insists, requires not more concessions by auto workers—but a Japanese-style government health-care system for all workers.