Ford says rising health care costs trouble for automaker - Ford Forums

Stacy94PGT · 05-31-2003, 01:02

Saturday, May 31, 2003

Mackinac Island | Leadership Policy Conference

By Amy F. Bailey / Associated Press
Al Goldis / Associated Press

MACKINAC ISLAND -- The skyrocketing cost of health care is one of the toughest challenges facing Ford Motor Co., chairman and CEO Bill Ford Jr. said Friday.

Ford told the Detroit Regional Chamber's annual Leadership Policy Conference that the rising prices of health benefits is the "biggest issue on our plate that we can't solve."

"Health care is just out of control," he said. "It's a system that's broken. It really scares me enormously."

Last year the Dearborn-based automaker spent $2.7 billion on health care and drug charges for 93,000 white-collar workers, retires and dependents.

Changes to Ford's employee health benefits, including increased out-of-pocket annual payouts and higher prescription drug costs, take effect Sunday.

Salaried employees with families enrolled in the Ford Comprehensive Medical Plan will see their deductibles increase from $250 to $600. The out-of-pocket maximum annual payout will increase from $500 to $1,000 and prescription drug copays will increase from $5 to $7 for generic drugs.

Ford Motor Co. isn't the only automaker that is charging its retires more for health care coverage. On Jan. 1, General Motors Corp. passed along premium increases averaging $25 a month to its 160,000 white-collar retirees.

The solution to the health care problem will require government and business to work together in a new way, Ford said.

Although the cost of pensions is another concern for the world's No. 2 automaker, Ford said that problem will go away when the stock market improves.

Ford also told the audience that the automaker is a strong supporter of mass transit. The conference host, the Detroit Regional Chamber, has been a longtime advocate of the Detroit Area Regional Transportation Authority, a regional transit system in metropolitan Detroit.

"I think it does hurt the region that we don't have a better mass transit system," he said. "I guess there's an inherent notion out there that somehow because we're an auto company we're against mass transit. We're not at all. ... It's not an either-or. I think in today's world you need both."

Ford also reflected on the automaker's upcoming 100th anniversary on June 16 and the company's future. He spoke about $2 billion in improvements at Ford's Rouge Industrial Complex and the return of public tours to the plant for the first time since 1980.

Gov. Jennifer Granholm, scheduled to begin her campaign to boost Michigan tourism on Sunday, applauded the plant tours that Ford said will be a new draw for tourists.

Andrew Richner, a former state representative and a member of the University Michigan Board of Regents, said he was happy to here that the plant tours were returning.

"I remember doing that as a kid," he said. "Whenever we have friends visit, they want to know if they can take a tour of an auto plant. This is something we have that's unique to the world."

(Photo) William Clay Ford, Jr., chairman and CEO of Ford Motor Co., speaks during the Detroit Regional Chamber Leadership Policy Conference Friday on Mackinac Island.