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fyi  - excerpt from today's Detroit Free Press:

CAW to stand ground in talks

No givebacks, head of auto union says

BY JEFFREY McCRACKEN
FREE PRESS BUSINESS WRITER

Detroit's automakers won't find it easy to squeeze costs by leaning on their workers across the border.

The president of the Canadian Auto Workers says his almost 42,000 union members have no intention of making any concessions to Detroit's automakers on wages, pensions or health care when the CAW begins contract negotiations this summer.

Their reasoning: It's already cheaper to do business in Canada.

"We are not going to go backward, not on wages, pensions or other matters. We go forward with talks and make progress for our workers," said Buzz Hargrove in an interview Wednesday with the Free Press. "We could work for free and they'd still have plenty of problems. Their issues are market share and all of the business they are losing to import vehicles. I think the automakers' problems are with trade in Canada and the United States, and that's not going to be something we solve at the bargaining table."

The CAW says Canada's national health care plan gives it a substantial labor-cost advantage over the United States.

It says that savings and a weak Canadian dollar that lowers the cost of doing business in Canada give the CAW leverage it can and will use. And with U.S. health care costs rising at double-digit levels the last few years, that cost advantage has only grown.

Hargrove also said the automakers "know it is less expensive and more efficient to do business" in Canada, so they are more willing to accede to CAW demands...

GM spokesman Stew Low acknowledged "a cost advantage with Canadian operations," but added the automakers still must try to negotiate an agreement that keeps down costs...

Hargrove acknowledged GM's and Ford's struggles -- and added he understands Chrysler could slip quickly as well -- but said what ails the automakers is not labor costs, but the flow of import vehicles from Korea, Japan and elsewhere.

He also blamed the increasing sales of automobiles made in the United States by foreign automakers like Toyota, Honda and Nissan, which have plants in states like Kentucky, Ohio and Tennessee. He said U.S. auto consumers should understand that those automakers don't typically create as many direct and indirect U.S. jobs as do Detroit's automakers.

"We still expect progress for our members, despite things like the junk-bond downgrade, which is something we can't control or fix at the bargaining table," said Hargrove, who has been CAW president since 1992. "If the Big Three were at 70% market share in the United States, they'd be sitting on a pile of money. This is about the transplants and the imports, who are having a huge impact on Big Three market share."

Market share for Detroit's automakers is down to 59.9% for the first four months of the year, an all-time low. Meanwhile, market share for Toyota, Honda, Nissan and Korean automaker Hyundai are all up this year.

The CAW estimates that Canada's national health care system saves automakers about $4 per hour per worker. Automakers still provide some benefits to Canadian workers, for items like prescription drugs, private hospital rooms and dental and vision coverage.

Hargrove says the cost works out to $150 per vehicle built in Canada, versus an estimated $1,400 or more in the United States.

The average CAW worker makes about $67 an hour Canadian -- including benefits like pensions and medical care -- which works out to about $54.17 an hour in U.S. dollars. By comparison, GM estimated its U.S. labor costs at $78.39 an hour in 2003.

"Canada is such a low-cost, efficient place to build vehicles, so there is an overall advantage to building in Canada, which Buzz makes the most of," said Dennis DesRosiers, Canadian auto analyst with DesRosiers Auto Consulting in Toronto.

"He will get most of what he wants because he knows Canada is such a great place for the automakers. The feather in his cap is that the Canadian taxpayer subsidizes the cost of health care for GM, Ford and Chrysler to the tune of billions of dollars," he said.

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Of course, the per capita expenditure on health care in Canada is also qualitatively less than in the U.S. due primarily to lower administrative costs largely due to the elimination for the most part of parasitic health insurance companies.

Cheers,
Traven
disclosure: I'm not only a Bolton Valley ski patroller, but a former auto worker and current proud union member



No. The time is not right for universal health care.
There must be a crisis.

It is unclear how another massive underfunded
government entitlement program is supposed to make our
economy more "efficient". Our already high tax burden
has huge negative effects.
The government has ~$24 Trillion in unfunded
liabilities as it is. Is universal health care a good
thing because it will collapse the entire rotting
structure.
Steve

Actually the corporations are already doing an impressive job of "externalizing" or shifting their costs/risks onto the taxpayers - expect taxpayers to be forced to should a multi-billion dollar bailout of the Pension Benefit Guaranty Corp.:

New Strains On Safety Net For Pensions

By Albert B. Crenshaw
Washington Post Staff Writer
Thursday, May 12, 2005; E01

A bankruptcy court's approval Tuesday of a deal between the government's pension insurance agency and United Airlines marks the latest, and perhaps most spectacular, in a series of changes that are restructuring the relationship between American workers and large employers.

It also places severe new strains on the social safety net that has underpinned traditional private pensions since enactment of the Employee Retirement Income Security Act (ERISA) in 1974.

Under terms of the deal, many United workers, particularly pilots, will get far lower pensions than those promised by the airline years ago. At the same time, the government insurer, the Pension Benefit Guaranty Corp. (PBGC), formally takes on four pension plans that are underfunded by billions of dollars.

The United plans, which together cover more than 120,000 workers, retirees and dependents, have assets that are $9.8 billion short of what is needed to pay the full promised benefits. But because the PBGC's annual guarantee is $45,613.68 for workers retiring at age 65, those who have been promised more could see their pensions reduced. Taking that into account, the PBGC figures it is taking on about $6.6 billion of the underfunding.

But the PBGC is also increasingly nervous about the fate of the remaining "legacy" carriers that still have pension plans. If they cannot compete with United and other carriers that do not have large pension costs, they, too, may file for bankruptcy and shift their pensions onto the agency.

The PBGC has been hit with a series of blows in recent years that have reduced its own funding status from a surplus of $9.7 billion in 1999 to a deficit of $23.3 billion last fall. The PBGC's deficit, which already included United's costs, anticipated by the agency, consists of the present value of its liabilities minus its assets...

However, a model by the Center on Federal Financial Institutions, a group that studies government insurance and lending, predicted last fall that the agency would run out of cash about 2020.

The question of what to do now confronts policymakers and employers in stark terms.

"We are at a real inflection point when it comes to figuring out what retirement security is going to look like" in the future, said Kevin Wagner of benefits consultants Watson Wyatt Worldwide. And, he said, a key question is, who will bear the risk of saving for retirement? ...


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