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Retirement benefits are one of the hang-ups in UAW negotiations

ARI SHAPIRO, HOST:

Health care coverage for life, guaranteed monthly income until you die. Very few Americans enjoy these benefits today, but autoworkers had them for years, and now they want them back. It's one of the sticking points in the talks going on now between the Big Three automakers and the United Auto Workers union. NPR's Andrea Hsu has more.

(SOUNDBITE OF CAR HORNS HONKING)

ANDREA HSU, BYLINE: On the picket line outside the Ford Assembly plant in Wayne, Mich., it's a gathering of generations. There's Drew Van Wasshenova.

DREW VAN WASSHENOVA: I just got out of high school, and I've been working here for about two weeks.

HSU: Two weeks before the strike started. He's happy to have the job and thinking his timing might not be bad.

VAN WASSHENOVA: Hopefully, I'm getting in at a good time with this contract coming up. I'm really excited about it.

HSU: And who else is excited? Mario Williams, who's worked for Ford for almost three decades.

MARIO WILLIAMS: Yeah, I've got 29. I'm retiring next year.

HSU: Oh, OK.

WILLIAMS: So that's why it's so important to me. It's like, this is not just for me but for all the new people coming in.

HSU: Williams is what's called a legacy worker, hired in before 2007, when the UAW agreed to big concessions. New hires had to do the same work for less pay and far fewer retirement benefits. Now fast-forward to today. The Big Three have agreed to get everyone back on the same wage scale, but they haven't agreed to bring back pensions or retiree health care. And that in particular worries Williams and his friend Christy Barrymore, who works in the paint shop.

CHRISTY BARRYMORE: I can tell you just about everybody that makes it as long as we have is going to have a knee replacement or a hip replacement...

WILLIAMS: Shoulders.

BARRYMORE: ...Or shoulders.

WILLIAMS: Yes.

BARRYMORE: It's wear and tear on your body. And you're in there, and it's a hundred degrees, and you're throwing wire harnesses in a car. It's hard, hard work.

HSU: Now, these two will tell you they do have excellent health care. They pay no premiums. Their co-pays are low. And they will get essentially the same thing in retirement but not those hired after 2007. That's because those same generous benefits brought the car companies to their knees. In the financial crisis, two of the Big Three filed for bankruptcy. Marick Masters is a business professor at Wayne State University.

MARICK MASTERS: There was no way that they were going to be able to survive.

HSU: The pool of retirees was ballooning. At one point, GM had 10 retired workers for every active one. The car companies couldn't compete with their foreign rivals, who had set up nonunion shops in the South. Plus, companies all over the place were getting rid of pensions. Hardly anyone was offering retiree health care.

MASTERS: It was becoming harder and harder to justify.

HSU: The UAW agreed to the concessions, seeing it as a way to return their companies to profitability. But now that profits have come roaring back, the union is demanding those benefits back as well.

MASTERS: And Shawn Fain, unlike previous leaders in the recent past, has pushed this.

HSU: And already that push has yielded results. GM says it's offered to put more money into employees' 401(k) plans, which replaced pensions, and to set aside more money that retirees can use for health care. Ford and Stellantis have also upped their offerings. Outside the Jeep plant in Toledo, Ohio, Chris Snyder, who builds engines, wonders how much more the union will be able to squeeze out of the companies.

CHRIS SNYDER: I just don't think that a company is going to pay you for 20-plus years after you've already - sure, you've given them 30-plus years of your life. But another 20 years that you're going to live - I mean, that's a long time to be asking for.

HSU: But Chris Snyder does want to see changes to their 401(k)s. Right now the automakers cap their contributions at 40 hours a week.

SNYDER: So here at Stellantis Jeep, we work 60 hours a week.

HSU: He wants the cap removed and wants some additional matching incentive to encourage younger workers to save. Marick Masters says he expects the Big Three will get creative to satisfy the union's demands. But a return to the retirement security of the past - well, that's a hard sell.

MASTERS: Their investors would literally throw up their hands and declare them something that you don't want to invest in.

HSU: In other words, not a chance. Andrea Hsu, NPR News.

(SOUNDBITE OF NXWORRIES SONG, "WHERE I GO (FEAT. H.E.R.)") Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Corrected: October 16, 2023 at 8:00 PM AKDT
This story incorrectly stated that at one point, GM had 10 retired workers for every active one. In its 2005 annual report, GM reported 3.2 retirees and surviving spouses for every active employee in the U.S.
Andrea Hsu is NPR's labor and workplace correspondent.