DETROIT — Ford Motor Co. expects the cost of health insurance for its 56,000 hourly workers in the U.S. to top $1 billion for the first time next year, according to a person familiar with the situation, highlighting a growing expense for automakers even as car sales slow.
Those mounting health care costs represent a potential sticking point in this year's contract talks between the UAW and the three U.S. automakers that tried and failed four years ago to address an expanding outlay that threatens profits and jobs. At Ford, General Motors and Fiat Chrysler Automobiles, the tab for health insurance topped $2 billion in 2015 and has only grown since.
Bargaining negotiations get underway this summer on contracts that expire in September with each of the three automakers. Some experts say divisive issues including cost sharing for health care benefits may lead to striking.
The UAW must balance its protection of benefits with the need to keep workers on the job at a time when GM is planing to shutter five North American factories and Ford is slashing shifts and cutting jobs as part of an $11 billion restructuring. Although the three automakers remain profitable, they are bracing for a slowdown that could become a recession while spending billions to prepare for a future dominated by electric and self-driving cars.