Your Money Or Your Life

"As long as you have your health . . . " a familiar saying declares. But white-collar employees of General Motors who want to be certain of their health will soon have to ante up for it themselves. GM, having spent more than $3.4 billion on health care for its employees last year -- or $900 per vehicle -- has decided to apply the brakes. Last week 100,000 office-level employees at the company's finance unit and its U.S. car and truck division received memos informing them that they will be asked to pay a monthly premium of as yet unrevealed size for their health insurance next year. Retirees will also have to pay part of the cost of postretirement medical benefits. Unlike blue- collar workers represented by the United Auto Workers, who pay nothing for their health care, GM's white-collar employees are not protected by union contracts.

The move surely did not pass unnoticed by GM competitors Ford and Chrysler. While they still offer fully paid health-care plans to their employees, both companies are similarly groaning under the burden of escalating health costs. The changes also set the stage for a battle next year with the U.A.W., which will resist any effort to shift health costs to its members. Says Don Douglas, president of U.A.W. Local 594 in Pontiac, Michigan: "There's no doubt it's going to be a major issue in next year's negotiations."

GM and the union are already at odds because of company plans to close 21 plants. Last week 2,300 GM workers struck a parts plant in Lordstown, Ohio, over job security. The action halted the assembly line for the much touted Saturn, which depends on a steady flow of auto components to meet its Japanese-inspired "just in time" production system.