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Thousands of GE Workers Strike Over Health Care

Unions walk out to protest cost increases for medical expenses. Companies are squeezed by employee demands, escalating premiums.

January 15, 2003|From Reuters

More than 17,000 General Electric Co. workers walked off the job Tuesday over higher health insurance payments as mushrooming health-care costs increasingly become a flash point in labor relations.

Two of GE's electrical unions called the walkout to protest an increase of $200 to $400 in annual costs for out-of-pocket medical expenses for prescription drugs and hospital visits.

The strike, the first against General Electric since 1969, hit 48 plants in 23 states. One striker was struck and killed by a car as she picketed outside a plant.

Companies and health-care experts said double-digit rises in health-care costs and medical-care cutbacks will be the hot-button issue in union negotiations this year.

In 2002, workers threatened to strike over the issue at New York City's Metropolitan Transit Authority and did walk out at Hershey Foods Corp. Health-care costs were a major bone of contention in talks between Navistar International Corp. and its workers last fall.

In 2003, Verizon Communications, Brown & Williamson Tobacco Corp. and Lucent Technologies Inc. have contract talks nearing, according to the U.S. Department of Labor.

The United Auto Workers, which has about 730,000 active members, has said that it will not stand for cutbacks to health benefits when it launches new contract negotiations later this year with the Big Three U.S. automakers: General Motors Corp., Ford Motor Co. and DaimlerChrysler's Chrysler unit.

Major corporations are feeling the squeeze between worker demands and escalating health premiums. And a retreat from soaring costs does not appear in sight: Health insurance prices jumped 13% in 2002, the biggest increase since 1990, and double-digit growth is forecast for this year as well, according to the Kaiser Family Foundation.

GM told Wall Street analysts its health-care costs will rise to about $4.4 billion before taxes this year from $3.9 billion in 2002. The company has about 175,000 salaried and hourly workers.

HMOs hold the upper hand in negotiations with employers because individual companies usually are not large enough to bargain from positions of strength. The most striking example was the 1.25-million-member California Public Employees' Retirement System. Even after Cal- PERS dropped health-care providers PacifiCare Health Systems Inc. and Health Net Inc. to protest rising costs, the third-largest U.S. buyer of health care was forced to pay an average 24% increase in premiums in 2003, up six percentage points from 2002.

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