Health care costs pose a stumbling block in upcoming labor contract talks between the UAW and the Detroit 3.
Here's the rub: UAW members receive generous health care coverage for which they pay little compared with most other workers in the United States.
It's time for members to strongly consider paying more of their health care costs so they can achieve long-delayed raises and other goals in this year's negotiations.
The UAW is correct to argue that members have those generous health benefits precisely because they chose to prioritize them in previous rounds of negotiations. UAW members sacrificed raises and other benefits they could have bargained for because they valued their superior health care benefits.
Skyrocketing health care costs are a chronic problem in the United States. For decades, health care costs have risen faster than the rate of inflation, consuming an ever-larger portion of total compensation. The winds of change should no longer be resisted by the UAW.
There's an additional twist this time. Provisions of the Affordable Care Act penalize companies with high-cost health care benefits starting in 2018, and the Detroit 3 face a potential "Cadillac" tax of 40 percent on excess health care benefits that would take effect during the next round of contracts.
The Cadillac tax raises pressure on the UAW to relinquish ground on health care costs.
If the union does give ground, that should strengthen its case for achieving other goals. For instance, top-tier UAW workers have not received a wage increase in 10 years. And entry-level workers are clamoring for more money to bring their wages closer to those paid to longer-serving colleagues.
On the other side of the table, Detroit 3 executives clearly feel the need to keep labor costs competitive with their international rivals.
Labor experts expect Detroit 3 negotiators to try to keep any labor cost increases in this round of talks at the rate of general U.S. inflation -- a target they have managed to achieve for the past 12 years.
Ultimately, collective bargaining is about trade-offs. Yes, Detroit 3 sales and profits are strong. And UAW workers sacrificed a lot to help the companies get through the downturn.
There's room for both sides to give way to reach a sound agreement.