Detroit-based United Auto Workers has plans to overhaul healthcare for autoworkers through an independent co-op that experts are saying could be difficult to pull off, according to The Detroit Free Press.
Here are five things to know about the proposition the union is discussing in contract negotiations with the Detroit Three: General Motors, Ford and Fiat Chrysler.
1. The independent co-op would create a pool of unionized and salaried autoworkers from all three companies whose combined purchasing power could negotiate better rates for healthcare, according to the report.
2. According to the report, healthcare is second only to wages as the largest labor cost for automakers. Ford has reported a 45 percent increase in healthcare costs since 2011, rising to $800 million from $550 million, while Fiat Chrysler's costs have risen 73 percent since 2011 to more than $600 million from $347 million, according to the report. GM did not provide cost information.
3. Ford and Fiat Chrysler responded favorably to the proposal in statements, according to The Detroit Free Press, but GM did not comment.
4. The proposal is considered risky due to regulatory hurdles and time needed to develop the program. "It's risky ... I am not naive," UAW President Dennis Williams told the Free Press. "But I've examined this in every damn direction I can. I don't know of any other way to tackle the problem."
5. Controlling healthcare costs is a top priority for UAW during negotiations. It hopes to use healthcare savings achieved through the co-op as a bargaining chip for wage increases, according to the report.
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