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Will next UAW-Detroit Three contract bring big changes to health insurance?

Ford Motor Company

It's crunch time for negotiators for the United Auto Workers, and Ford, Chrysler, and General Motors.

Union contracts with the car companies expire next week, on September 14.

UAW negotiators are trying to reach a deal acceptable to current workers, without sacrificing the long-term prize of more U.S. jobs, according to Harley Shaiken, a labor union expert at the University of California-Berkeley.

"They're fully aware that they can negotiate a generous contract in 2015, only to have far fewer jobs four, five years down the road when it expires," says Shaiken.

It's likely that one of the issues on the table is a UAW proposal for a new way to provide health insurance for members. 

UAW President Dennis Williams earlier this summer said he thought pooling Chrysler, General Motors, and Ford workers together in a health insurance co-op could reduce health care costs for the companies. 

It's based on the assumption that the larger group would have more power to negotiate lower prices with providers, something the UAW retiree health care trust has been able to do.

"This would be a leap of faith, a little bit, by the companies," says Art Schwartz, President of Labor and Economics Associates. "You know, who's going to do it, how effective are they going to be, is this group enough? What are the details on this?  In theory, this is doable."

Other issues include narrowing the pay gap between so-called tier one and tier two workers. More recently hired workers are hired in at about half the hourly wage of more senior workers.

Long-term workers also haven't had an hourly wage increase in ten years. Instead, they have had profit-sharing checks. The size of the checks depends on how much money each automaker makes.

Harley Shaiken says the tone of contract talks is much less combative than it was before the recession and the bankruptcies of Chrysler and General Motors. 

But that doesn't make reaching a new contract easy.

Tracy Samilton covers energy and transportation, including the auto industry and the business response to climate change for Michigan Public. She began her career at Michigan Public as an intern, where she was promptly “bitten by the radio bug,” and never recovered.
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