DETROIT (AP) — United Auto Workers president Ron Gettelfinger said yesterday that the union is sensitive to the financial problems of General Motors Corp., but he wouldn’t say how the union might relieve the company’s costs.
“The conventional wisdom is that the UAW has not done anything to help General Motors take costs out of the system, that we have our heads in the sand on this issue,” Gettelfinger said in a speech to the Detroit Economic Club. “Well, the conventional wisdom is just plain wrong.”
GM has asked the union to help it lower its health care costs before its contract expires in 2007. Gettelfinger said the union is optimistic it can reach a deal without reopening the contract.
But he also said the union has been unfairly portrayed as doing too little to control costs. In the 2002 contract, he said, the UAW agreed to increase copays for prescription drugs and switched members to more efficient health care providers.
A pilot project to improve health care in communities in Indiana and Ohio saved $10 million in 2004, Gettelfinger said, and a new electronic prescription program also is expected to save millions.
GM has said it needs more significant changes to curb health care spending, which is expected to reach $5.6 billion this year.
For example, the company has suggested that UAW-covered hourly workers should have the same health care plan as salaried workers.
GM’s salaried workers pay 27 percent of their health care costs, while its hourly workers pay 7 percent, according to GM.
Gettelfinger wouldn’t reveal any details about negotiations with GM or Delphi Corp., GM’s former parts division, which has threatened to file for bankruptcy this fall if it doesn’t get some concessions from the UAW.
But Gettelfinger did say health care is only one of GM’s problems. The world’s largest automaker lost $286 million in the second quarter, down from a $1.4 billion profit a year ago.
“Health care costs alone — for that matter, total labor costs — don’t explain GM’s market share falling from 41 percent in 1985 to just over 25 percent today,” Gettelfinger said.
“Decisions about product, marketing and advertising strategies and many other factors, including bad U.S. trade policy, had something to do with that too.”
Gettelfinger also called for policy changes in the wake of Hurricane Katrina. Images of poor citizens trying to cope after the hurricane have forced Americans to confront social inequality, he said.
Congress should respond by raising the minimum wage and giving tax credits to manufacturers who make energy-saving vehicles, Gettelfinger said.