Retiree health care obligations are "likely to be the major issue" in contract negotiations between United Auto Workers and the Big Three automakers, the AP/Washington Times reports (Krishner, AP/Washington Times, 7/25).

UAW on Monday began contract negotiations with General Motors and Ford Motor and on Friday began contract negotiations with the Chrysler Group. UAW contracts with the three companies will expire on Sept. 14 (Kaiser Daily Health Policy Report, 7/23).

According to the AP/Times, the automakers have an estimated $90.5 billion in unfunded retiree health care obligations, a "problem that is coming to the forefront in the auto industry and one that has not been handled by many companies and even governments nationwide." In response, the automakers have considered an agreement reached late last year between Goodyear Tire & Rubber and the United Steelworkers of America (AP/Washington Times, 7/25).

Under the agreement, Goodyear transferred retiree health care obligations to an independent trust fund, or voluntary employee beneficiary association, that the union will manage. In exchange, Goodyear established a $1 billion fund to pay health care costs and agreed to invest at least $550 million in manufacturing facilities represented by the union (Kaiser Daily Health Policy Report, 7/23).

Goodyear agreed to fund 83% of total retiree health care obligations, but the automakers likely will seek to fund 50% to 60% of total obligations. The automakers discussed such an agreement with UAW in advance of the contract negotiations, but the union declined to comment on the prospects of a deal (AP/Washington Times, 7/25).

Broadcast Coverage
PBS' "The NewsHour with Jim Lehrer" on Monday reported on the contract negotiations between UAW and the automakers. The segment includes a discussion with James Womack, founder and chair of the Lean Enterprise Institute, and Harley Shaiken, a professor at the University of California-Berkeley who specialize in labor issues (Ifill, "The NewsHour with Jim Lehrer," PBS, 7/23). Video, audio and a transcript of the segment are available online.

WBUR's "Here & Now" on Monday included a discussion with Micheline Maynard, New York Times Detroit bureau chief, about the contract negotiations ("Here & Now," WBUR, 7/23). Audio of the segment is available online.