NASHVILLE, Tenn. -- Nissan has dropped standard health care coverage for retirees, and UAW President Ron Gettelfinger believes the change will put the union in a more favorable light in hard-to-organize Southern states.
"There's no question that with the passage of time, more and more people will see they need a union down there (in Southern states) to represent their interests," says Gettelfinger. Nissan's manufacturing workers rejected the UAW by 2-to-1 margins in 1989 and 2001.
Nissan's switch will have little impact on retiring workers -- now. The automaker has done what other U.S. manufacturers wish they could, creating a new health plan that covers retirees and reassures the corporation.
"It'll make our costs more predictable," says Marlin Chapman, director of human resources at Nissan North America Inc. in Smyrna, Tenn. "We're choosing to manage our costs now so that in the future, we won't have to make changes we don't want to."
In effect, Nissan Motor Co. CEO Carlos Ghosn is shifting the uncertainty of rising health care costs from Nissan to its retirees. It is part of a change sweeping corporate America in which companies are switching from defined benefits (with uncertain costs) to defined contributions for health care and pensions.
In the coming years -- if health care costs keep escalating considerably -- Nissan retirees will shoulder a significant share of the costs.