Auto talks and the Medicare drug bill

DETROIT – Union leaders, rank-and-file members and retirees have pledged to hold the line on the health care issue during this summer’s contract talks with the Big Three auto companies and related parts suppliers. A recently released UAW report, titled “Bargaining for America,” highlights the challenges confronting the auto union’s bargaining teams.

Much of the corporate media has focused on the issue of health care. The auto companies hope to use this hot button issue to control the bargaining and force the union into other concessions. Reports in Automotive News and the Detroit Free Press hint that the union will make concessions on plant closings and layoffs in order to preserve the status quo on the health care plan. Union officials have repeatedly denied these reports to the World. The current contract limits layoffs and has a moratorium on plant closings.

As talks began, a flurry of reports from the corporate media played up the financial difficulties of the U.S.-owned auto companies. They cited a declining market share, rising pension liabilities, and growing health care costs. But the corporate media coverage ignored the decade-long financial success of the Big Three and the big gains in worker productivity, which the auto companies squandered on huge bonuses and other financial perks for executives.

The existing health care plan is considered one of the best in any industry in the country. According to the UAW’s report, “Covered services for active and retired members include hospital, surgical and medical services … dental care, vision care, and hearing aids.” One of the most popular features of the plan is its prescription drug coverage. A growing number of active members are closing in on retirement and consider retiree benefits to be crucial. Over half of the costs covered under the agreements go to retirees and dependents.

The auto companies will save $150 million in health care costs if the Bush-backed version of a Medicare drug bill is passed. Calling the bill a payoff for the auto companies, some in the corporate media have pointed to the legislation as a way to sidestep the health care issue in the bargaining sessions.

But thousands of UAW retirees could lose coverage or see their coverage reduced under this law. According to the union’s report, “The benefits are much too modest, would leave seniors with large out-of-pocket costs, and are delivered through unreliable private insurance carriers. Worst of all, the bills discriminate against retirees who already have prescription drug coverage through an employer-sponsored plan, providing them with less benefits than other retirees.”

Ultimately, such a law would not reduce health care costs. A short-term financial boon for the auto companies would quickly turn into higher premiums and other costs that the companies would have to pick up, as the union has pledged to fight the shifting of higher costs to workers. The solution to this impasse requires comprehensive health care legislation. Comprehensive reform would help save the auto industry.

The UAW calls for a universal, single-payer health care plan. Will the auto companies support this call?

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