(Bloomberg) –If General Motors Co.'s negotiations with the United Auto Workers are any indication, Detroit's automakers may not have a prayer in their effort to rein in rising health-care costs.
As GM was nearing the expiration of its labor contract with the union last week, the carmaker sought to have hourly workers pay 15 percent of their health-care costs, according to people familiar with the talks. But by the time the company presented the UAW with a deadline offer, GM walked back the proposal and called for keeping contributions steady at about 4 percent, said the people, who asked not to be identified discussing private discussions.
The quick cave on health costs still wasn't enough to ward off a walkout by 46,000 GM employees. The episode is a bad omen for Fiat Chrysler Automobiles NV and Ford Motor Co., since the UAW typically tries to pattern contracts reached with Detroit carmakers after one another. Ford is expecting the insurance bill covering its 56,000 hourly workers to exceed $1 billion for the first time next year, Bloomberg News reported in March.
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