The Virginian-Pilot (Norfolk, VA.), December 23, 2005, Friday

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The Virginian-Pilot(Norfolk, VA.)

December 23, 2005 Friday
The Virginian-Pilot Edition

SECTION: BUSINESS; Pg. D1

HEADLINE: Local dissent couldnt save Ford benefits

BYLINE: JEREMIAH MCWILLIAMS

BODY:
BY jeremiah mcWilliams
THE VIRGINIAN-PILOT
NORFOLK Workers voting in a special labor contract referendum Wednesday at Ford Motor Co.s Norfolk Assembly Plant overwhelmingly rejected a plan to cut the companys spending on medical coverage. But their votes were not enough to stop the plan, which eked out approval nationwide 51 percent to 49 percent.
Ill tell you one thing: Its certainly sent the UAW and Ford a message, to let them know theres a lot of rank and file down here that arent happy with it, said Chris Kimmons, president of United Auto Workers Local 919 ; about 61 percent of 591 votes cast were negative. There were a lot of people saying, No, no, leave those retirees alone.Pending approval by a federal court in Michigan, the plan will require active workers to contribute to a postretirement health care fund by deferring some future wage and cost-of-living increases.
Retirees could pay as much as $752 a year per family for medical coverage, although active workers and retirees with Ford pensions of $8,000 or less per year will remain largely unaffected.
Union leaders on Dec. 14 unveiled details of a tentative agreement with Ford, which then had to be voted upon by the membership.
Ford estimated that the concessions will save the company $650 million on a net, before-tax basis every year, starting in 2006. The company incurred $3.1 billion in health care costs in 2004, and it predicted those costs would rise to $3.5 billion this year. The No. 2 U.S. automaker is struggling to meet its health care obligations as its market share declines.
We are just working very diligently to bring those costs under control, said Marcey Evans, a Ford spokes woman . Having an annual savings like this will certainly have an impact. Providing good benefits is very important to Ford.
Kimmons estimated that the arrangement, which is scheduled to last until 2011, could touch about 900 retirees from UAW Local 919. Nationwide, it may affect two-thirds of the 550,000 people nearly 367,000 who are covered by Ford benefits, Evans said.
Employers are in this race to the bottom theyre trying to put all the pressure on union workers, said Kate Bronfenbrenner, director of labor education research at Cornell Universitys School of Industrial and Labor Relations in Ithaca, N.Y.
Union workers are feeling the heat, because employers are trying to break the last stronghold, basically to make us all Wal-Marts, she said.
Ford incurred a $1.2 billion pretax loss in its North American auto operations in the third quarter of 2005 and is preparing to announce plant closings and job cuts.
The U.S. auto companies have been making bad management decisions for a long time, Bronfenbrenner said. That isnt the workers fault. This wasnt about productivity this was about making the right kind of cars that Americans want to buy.
Despite the controversy surrounding the deal, only about one in four of the Norfolk plants approximately 2,400 union workers voted.
It was a slow turnout, Kimmons said.
Some people have the concept that whatever the UAW sends down here, thats what theyre going to do. Well, thats just not true. Youve got to stand up and voice your opinion.
Bloomberg News and news researcher Jakon Hays contributed to this report.
n\Reach Jeremiah McWilliams at (757) 446-2344 or jeremiah. mcwilliams@pilotonline.com.

the vote
The plan was approved nationwide 51 percent to 49 percent. coverage
Pending approval by a federal court in Michigan, the plan will require active workers to contribute to a post-retirement health care fund by deferring some future wage and cost-of-living increases. Retirees could pay as much as $752 a year per family for medical coverage.