Auto Workers’ Benefits: Catching Up with the Times
Broadcasters worry about the future of
the American economy, but the NY Times points out that automakers
are behind other industries when it comes to the reality of employee
benefits.
By Amy Menefee
Free Market Project
Oct. 18, 2005
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At the announcement of General Motors Corp.’s new contract with
union workers, The New York Times pointed out that the automaker’s
employees have enjoyed “eye-popping” health benefits surpassing most
other companies. But network newscasters saw the announcement of
reduced benefits as foreshadowing an economic downturn rather than
GM catching up with the times – and they glossed over a long history
of union demands driving up overhead costs.
    As the Times’ Danny Hakim reported on October 18, “GM
still appeared to be years behind big companies in other industries.
And the benefits that GM’s retirees retain will probably remain the
envy of many other retired Americans.” Hakim also noted that only a
few American companies don’t require retirees to pay premiums as
part of their coverage, but the major Detroit auto companies are
among them.
    But broadcasters didn’t see the history behind the
current story. Instead, they gave fearful reports that overlooked
the unions’ impact on the auto industry and encouraged anxiety about
the economy. ABC’s Elizabeth Vargas said on the October 17 “World
News Tonight” that “We got a glimpse today of what may be in store
for millions of people in the country worried about paying for
health care, and it wasn’t pretty.” Reporter Dean Reynolds agreed
that “what’s bad for General Motors could be bad for the USA.”
Reynolds listed several financial problems facing the U.S. auto
industry, including competition, gas prices and the decline in SUV
sales. However, he left out a history of union demands for higher
wages and comprehensive benefits that drastically raised companies’
overhead costs.
    Likewise, NBC’s Brian Williams repeated the adage that
“What’s good for our country is good for General Motors and vice
versa” on the October 17 “Nightly News.” He said those words, from a
former GM president, are remembered “because he was probably right.”
Reporter Anne Thompson included interviews with union members who
were unhappy about the benefit cuts, and Thompson warned that this
was a “new reality that could ripple through other car companies and
on to the rest of the manufacturing economy.” Tom Costello set out
to prove that point with a subsequent story featuring a small
businessman who said health care was his largest cost and the
president of Johns Hopkins University, who called GM “the canary in
the coal mine.”
    Refuting those statements, ABC News contributor Mellody
Hobson, who is president of an investment firm, emphasized the fact
that the trend broadcasters feared was in “corporations that have
large employee bases that are composed of unionized workers.” She
made that observation on the October 17 “World News Tonight,” and
had had more time on “Good Morning America” that same morning. On
the morning show, anchor Charles Gibson asked her if when “General
Motors sneezes, the rest of the country catches a cold.” But Hobson
replied that “it actually doesn’t have the effect that it used to.”
    Hobson also said it didn’t mean new troubles for other
industries: “when you look at the rest of the country and the rest
of the companies that are out there, they’ve already been to this
movie. They’ve really made these cuts already. We’re already seeing
most Americans share part of the health care burden.” She said that
only 4 percent of U.S. companies are like GM in that their workers
didn’t have to pay part of their health coverage.
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