By Laura Hipshire
THE ERICKSON TRIBUNE

Ford Motor Company is cutting benefits for U.S. salaried employees as it struggles to conserve cash after a $7.2 billion loss so far this year. The company is scaling back health care benefits and raising premiums, according to Marcey Evans, Ford spokeswoman.

Evans says Ford will eliminate health insurance for Medicare-eligible retirees in 2008 and raise health care premiums this year for employees by about 30%. This will be the second straight year of increase.

The number-two U.S. automaker will replace its traditional health coverage for salaried retirees age 65 or older with $1,800 health care spending account they can use to buy supplemental health coverage in addition to government-run Medicare. Ford will stop paying for any health care coverage for their dependent children, Evans says.

Michigan employees feeling the pain
Hard times at Ford, General Motors Corp., DaimlerChrysler Corp., and their suppliers mean hard times for Michigan, where all three are headquartered and where the auto industry dominates the economy. The state lost 336,000 jobs between mid-2000 and the end of 2006— the longest stretch of job losses since the Great Depression.

Michigan was the only state where people have continued to lose jobs for the past year. University of Michigan economists expect the state’s unemployment rate to hit 7.7% in 2008. As a result, the state leads the nation in the number of homes in foreclosure.

Jumping on the bandwagon
All of Michigan’s “Big Three” automakers are cutting health benefits. A spokesperson for DaimlerChrysler AG’s U.S. division, Chrysler Group, says the automaker has begun communicating with the United Auto Workers  UAW) over a health care relief package similar to what Ford and General Motors have won.