Health care plans first on chopping block for many companies

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 Ford spokeswoman Marcey Evans.

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%, the second straight year of increase.

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

Jumping the bandwagon
All of Michigan’s Big Three automakers are cutting health benefits. A spokesman 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.

A shared core issue for General Motors is health and retirement benefits as well. In his speech at the company’s annual meeting, GM Chairman G. Richard Wagoner Jr. stated that $1,500 of the price of every GM vehicle goes toward providing health benefits for current and retired workers and their families.

Shared concerns
Jerry Kmieciak, who is an important health insurance resource for the Henry Ford Village retirement community, just down the road from Ford World headquarters, says he views what’s happened over the past two years as a downhill trend that’s been picking up speed.