As GM Battles Surging Costs, Workers' Health Becomes Issue
Obesity, SMOKING, Inactivity Put Stress on Car Maker;
Advice for Deer Hunters
Some Take a Puff on the Job
By LEE HAWKINS JR.
Staff Reporter of THE WALL STREET JOURNAL
April 7, 2005; Page A1
JANESVILLE, Wis. -- Less than 100 yards away from the main entrance to the General Motors Corp. assembly plant here stands Zachow's tavern.
On an early afternoon in mid-March, GM workers who build big Chevrolet Suburban sport-utility vehicles sat elbow-to-elbow on bar stools, SMOKING cigarettes and drinking Milwaukee-brewed Miller beers and shots of scotch. Zachow's sells deep-fried pork rinds and 24 beers for $24. A sign in the corner reads: "Finish your beer. There are sober kids in India."
Scenes like this worry the GM brass as they grope with spiraling health-care costs. The company expects to spend $5.6 billion this year to care for 1.1 million active and retired employees and their dependents. Last year, health-care spending amounted to $1,525 for every vehicle GM produced in the U.S. Chief Executive Rick Wagoner, who personally took charge of North American operations this week, blames those costs for much of GM's profit woes. The company slashed earnings forecasts last month and could see its debt downgraded to junk status. (See related article.)
GM is threatening to ask its hourly workers to pay more out of pocket for their health care. That's likely to provoke heated negotiations with the United Auto Workers union, which has long fought to protect the gold-plated health benefits workers enjoy.
GM also has been broadening programs to discourage employees from unhealthy habits. It has added gyms to some plants and helps workers in northern states get ready for hunting season, while warning those with heart trouble not to try dragging a dead deer back to the pickup. But company executives, bound by labor agreements, are cautious about pestering too much. A majority of plants still allow workers to smoke on the assembly line while manufacturing GM vehicles.
Even if employees get healthier, it's not clear how much the company can save. Current employees and their families account for only about 31% of the total health bill. Retirees, who are less easy to reach with the live-healthy message, make up the remainder.
Still, GM is hoping it can at least make a dent in costs such as the hundreds of millions of dollars a year it spends on drugs to combat the ill effects of SMOKING, obesity and stress. It says 26% of its 1.1 million beneficiaries are considered obese under federal guidelines, slightly below the national average, and these people cost the company between $1,000 and $3,000 more in health services on average than beneficiaries who aren't obese. That suggests obesity is costing GM at least $286 million a year.
Robert Moroni, who runs GM's health plans, says drugs for cholesterol, high blood pressure and diabetes are among the highest-cost items for the car maker. Mr. Moroni is facing his own challenge. "My doctor just told me that if I don't lose 25 pounds, he's going to put me on Lipitor," he said, referring to Pfizer Inc.'s cholesterol-lowering drug.
SMOKING is one area that shows how far GM has to go just to catch up with health standards in many other parts of the country. In addition to permitting SMOKING on the job, many plants house cigarette machines on the premises.
At Janesville, a majority of workers voted last September to implement a "designated areas only" SMOKING policy. "I don't smoke and I don't want to stand on the line next to somebody that smokes all day long," says Rick Austin, a 10-year veteran who works on the radiator line. "I worked by a girl who smoked about 10 packs of cigarettes a day, just in 10 hours. She smoked a pack an hour. I don't want to work like that for 30 years."
GM officials are cautiously encouraging such steps. Carolyn Markey, who handles media relations at the Janesville plant, says changing the SMOKING policy has been "a huge cultural change around here." But the company shies away from provoking union members with a blanket SMOKING ban. "It's a local issue and it's a matter of local bargaining," says spokesman Stefan Weinmann at GM headquarters in Detroit. "It's not something that we can influence centrally."
"You're talking about people who have worked at a factory for 30 years or more," says Michael Kelley, a factory worker and former union official who works at a GM manual transmission plant in Muncie, Ind. "They don't want to be told that they can't do what they've been doing all along."
Mr. Kelley, who doesn't smoke, has worked at six different GM factories during his 32-year career. In October 2002, Mr. Kelley was diagnosed with metastatic squamous-cell carcinoma, a cancer which was found at the base of his tongue and can spread to the lungs. He said his doctors told him that second-hand smoke may have caused his cancer. For a short time earlier in his career, Mr. Kelley worked on the plant line alongside his mother, who worked at a GM factory for more than 30 years. He remembers her SMOKING occasionally as she worked. She died last year of pneumonia.
Mr. Kelley says he is now cancer-free and he doesn't blame GM entirely for his sickness. He estimates that GM paid more than $100,000 for his cancer treatment.
GM's push on healthy lifestyles dates back at least to 1996, when the company and the UAW started offering health classes and other services at two plants under a program called LifeSteps. In 2003, the program, which covers union workers, salaried employees and retirees, was expanded to all GM locations. Classes include SMOKING cessation and fitness. Some plants also have workout facilities.
Mr. Moroni, the GM health-plan chief, says he believes that the health of the company's work force is in line with the rest of the country. "We're no heavier than the rest of the country," Mr. Moroni said. "The country has a problem."
Last year the Michigan Economic Development Corp., a state agency, released a study describing Michigan as one of the least healthy states in the nation. Citing federal health figures, it said Michigan has the highest fatality rate for coronary heart disease per 100,000 population among 18 states examined in the study. GM employs about 77,000 people in Michigan.
Dee W. Edington, director of the University of Michigan's Health Management Research Center, said researchers at the center have studied GM's employee population since 1993. He says the typical GM auto worker is heavier than the average American but comparable to factory workers at other Midwestern manufacturing companies.
One creative effort of the GM LifeSteps program focuses on hunting, a popular pastime among GM workers. Charlie Estey, a consultant with the program, says the heart rate of hunters can shoot up to a deadly level when they spy a deer in the woods. Further, out-of-shape hunters may suffer heart attacks when they attempt to drag a 150-pound deer out of the woods. LifeSteps sponsors classes to get workers ready for the hunting season, and one in Flint, Mich., attracted 300 people.
"These guys go out, sleep late, drink beer, walk, climb into a tree stand, then see a deer and get heart palpitations," Mr. Estey said. "We really got a hook into these guys. These are 300 guys that would never come to an aerobics class or yoga, yet we were able to do some things with deer hunting and conditioning."
The program distributes healthy venison recipes, conditioning tips for hunting and safety advice such as "Never drag a deer if you have heart disease." The company has also brought in Denny Geurink, a former writer for Field & Stream, to speak to groups of hunters at GM and give advice on getting in shape for the season.
At Janesville, workers have had an on-site gym since 1995. Robbie Heise, a 28-year GM factory worker in the plant's materials department, is a LifeSteps success story. He works out daily at the plant gym and runs three to four miles three times a week. That helps him keep in shape to play with his kids and pursue his favorite hobby, bow-hunting. Still, he was diagnosed with high cholesterol last year.
"I came from a family of obese people," says Mr. Heise. "My dad had four heart attacks before he died." Mr. Heise said his father's father died at 49, and his father's brother died when he was 48. And although Mr. Heise's father lived until he was 80, his first heart attack was at age 56.
For other Janesville workers, the appeal of Zachow's is more powerful than anything the company gym has to offer.
Over smokes and brews, conversation buzzes among the workers. On Friday evening, "that place is packed," says Mr. Austin, the radiator-line worker. "If you want a beer, you better buy three or four at a time."
Favorite subjects around the bar include Brett Favre's Green Bay Packers and, when November arrives, the nine-day deer-hunting season. Both have affected the Janesville plant's operation. In 1998 GM had to shut down Janesville during a Monday-night game between the Packers and the Minnesota Vikings because 140 second-shift workers failed to report to work. GM auto workers in Janesville refer to the incident as an outbreak of "The Green Bay Packer Flu." The plant also closes for a day in conjunction with the deer hunt, although GM calls it a Veteran's Day holiday.
Zachow's has long been a worker hangout. At one time it was part of a residential neighborhood adjoining the plant. Later GM bought most of the neighborhood land, but the Zachow family declined to sell. Today the bar sits near the middle of the plant's parking lot.
Jim Zachow, co-owner of the bar with his wife, Mary, says he's in no hurry to exit the business, citing "good ol' family values." "We work hard for it," Mr. Zachow said. "We're not moving." However, he said he'd be willing to sell to GM "for the right price." A GM executive said the company has made offers but the Zachows wanted too much money.
Mr. Zachow said workers don't get drunk when they hit his bar during breaks. "They only have less than a half-hour for their breaks. If they can get two or three beers down, that's about it," Mr. Zachow said. "It's fast and furious. And they get a little exercise walking over. The bar is in a good place. If they were going down to the other bar down the street, they'd have to go down a whole mile."
"You can't control what people do on their lunch hour," said GM spokesman Jerry Dubrowski. "The important thing is if they come back and they are intoxicated or inebriated, whatever you want to call it, that we have a policy to deal with that." GM's policy is to perform a medical assessment on any employee suspected of being intoxicated. If the suspicion is confirmed, the employee is suspended and given a ride home by taxi.
Mary Zachow said some GM workers still smoke secretly inside of the plant. Ms. Zachow, who smokes herself, doesn't think it's a big deal. "There's more crud in that plant that you're breathing in than you're breathing out when you smoke," she said. "And if you go down to Marty's down the street, they allow SMOKING, too." |
