Unless the U.S. auto industry can reverse the tide of global economics and regain long-term domestic profitability, it appears the generous employee health-care packages of years past are destined for the scrap heap.
For the second straight year, more than 70% of respondents to the Ward’s Supplier Survey say their health-care coverage is less comprehensive than it was five years ago.
And like last year, an overwhelming majority from both the OEM and supplier ranks says rising health-care costs make it more difficult for their companies to compete globally.
The hot-button issue generates significant written comments from survey participants who say the need for nationalized health care is urgent.
However, more than half of OEM respondents and a resounding 78% of supplier participants say the U.S. government should not subsidize Big Three health-care obligations so those auto makers can compete with foreign companies that do not face such burdens.
“The government should not be held responsible for what the auto makers offered workers,” a supplier respondent writes. “Early retirement with full health care and no deductibles is ridiculously expensive.”
An OEM participant, however, sees nothing wrong with pressing for government intervention.
“Auto makers were hailed as good corporate citizens by providing health care and other benefits to its employees,” he writes. “Our government does nothing to help the 45 million Americans with no health care, but it is good at letting American jobs leave this country.”
The government needs to step in, some respondents argue, but only to help regulate costs nationwide.
As was the case in last year’s survey, participants this year – who tend to represent white-collar sentiments – say the United Auto Workers union needs to be part of the solution by accepting some of the financial burdens of individual health care, while leaving strident demands at the door.
“How can you ask the government/taxpayers to bail out the gold-plated benefits of the UAW members when they get better benefits than most everyone else in the country?” an OEM respondent asks.
Roughly half of supplier and OEM participants view blue-collar workers at their companies as unwilling to share in additional health-care costs and oblivious to economic reality.
“Some understand economics, many do not. Most seem to be out of touch with what adjustments will be done to survive,” a supplier respondent writes, adding that blame must be passed up the corporate ladder as well. “Management has no credibility in the eyes of blue- or white-collar workers.”
The pain of paying for health care needs to be spread evenly out of fairness, many respondents say.
“We need to stop coverage for retirees over 62 who are Medicare eligible,” an OEM participant writes.
“Socialism isn’t the answer,” another writes. “UAW member benefits must be the same as the benefits of white-collar workers,” who already pay a greater portion of their health-care expenses.
A few participants defend the UAW’s position with regard to health care, noting the union’s approval of GM’s plan last year to slash annual health-care costs by about $3 billion on a pre-tax basis.
“If it saves the company,” an OEM participant writes, “they (UAW members) are willing to help.”
Still, many survey participants point to unpopular realism.
“Free health care is a thing of the past,” a supplier respondent writes.