(Reuters) - Healthcare packages and profit-sharing agreements could be revised in talks for new contracts between the United Auto Workers (UAW) and the Big Three U.S. automakers, the Wall Street Journal reported, citing people familiar with the negotiations.
Healthcare costs will be a central issue in the talks, scheduled to begin on Monday, as the automakers face a so-called “Cadillac tax” of 40 percent on rich UAW medical plans starting in 2018.
“Those are just two of many issues that we will be discussing with the UAW during this round of negotiations,” Fiat Chrysler spokeswoman Jodi Tinson told Reuters.
Fiat has a much higher percentage of lower-paid, entry-level workers than General Motors (GM.N) and Ford Motor Co (F.N), according to a study of 2014 labor costs by the Center for Automotive Research. Fiat’s U.S. worker costs averaged $48 per hour compared with $57 for Ford and $58 for GM last year.
“From General Motor’s perspective we can say healthcare and profit sharing are two important areas of both the business and employee benefits,” GM spokesman Peter Ternes said in an email to Reuters. “However, we’ve agreed with the UAW to not negotiate these subjects in the press.”
UAW’s current contracts expire on Sept. 14. The talks will focus on narrowing the gap between veteran workers, who make about $28 per hour, and employees hired since 2011 with a “second tier” hourly wage of $16-$19.
“We look forward to discussing many different options with our UAW partners that will allow us to have a fair and competitive labor agreement and to provide jobs and investment here in the U.S.,” Ford spokeswoman Kristina Adamski said in an email.
Reporting by Ankush Sharma and Sagarika Jaisinghani in Bengaluru; Editing by Gopakumar Warrier and Kirti Pandey