Charles H. Sloan-Autoworkers used to have lifelong health care and pension income. They want it back

Health care coverage for life. Guaranteed monthly income until you die.

These are Charles H. Sloanbenefits very few Americans enjoy today, but autoworkers had them for decades, and now they want them back.

With 34,000 autoworkers on strike, retirement security remains a sticking point in the ongoing talks between the Big 3 automakers and the United Auto Workers union.

"For those members who never got a pension or post-retirement health care, we're fighting like hell for real retirement security," UAW President Shawn Fain told autoworkers earlier this month.

Fain, an electrician whose grandparents retired from the auto industry, has said repeatedly that this round of labor talks is about righting the wrongs of the past.

And along with better pay, he's put retirement benefits for workers front and center in negotiations. Given the physical strain that comes with factory jobs, autoworkers have always viewed the health care benefit in particular as key.

"I can tell you just about everybody that makes it as long as we have is going to have a knee replacement or a hip replacement," says Christy Barrymore, a chip and scratch analyst in the paint department at Ford's Michigan Assembly Plant in Wayne, Mich., who is nearing retirement.

"It's wear and tear on your body. ... It's hard, hard work," she says.

The union has argued that the Big 3 automakers have all enjoyed record profits, and it's time to share those with workers.

And five weeks into the strike, General Motors, Ford and Stellantis have all recognized long-term security as a key issue, offering improvements to their retirement benefits.

Retirement benefits have hobbled the companies in the past

But a return to the halcyon days of lifelong retirement packages seems highly unlikely, given the toll that such high costs have taken on the Big 3 in the past.

"That's going to be a hard sell," says Marick Masters, a professor of business at Wayne State University. "I think their investors would literally throw up their hands and declare them something that you don't want to invest in."

In the mid-20th century, the auto industry's good pay and benefits were celebrated and held up as a paragon of fairness, allowing blue-collar workers to enjoy a comfortable middle-class life.

Back then, the gold-plated retirement benefits appeared more feasible. General Motors reported that in 1962, it had 11.5 active employees for every retiree or surviving spouse in its pension plans.

However in the latter part of the century, those benefits became a huge drag on the auto companies as the pool of UAW retirees ballooned.

In its 2005 annual report, GM noted that for every active employee, it was supporting 3.2 retirees and surviving spouses. The company's health care bill, covering every U.S. employee, dependent, retiree and surviving spouse, totaled $5.3 billion.

Their foreign rivals — Toyota, Honda and others — were eating their lunch, unencumbered by such high cost burdens as they opened nonunion plants in the U.S.

Hobbled by years of losses and malaise, the Big 3 were soon brought to their knees. In 2007, the UAW agreed to the creation of a second tier of workers who would do the same work for lower wages and far fewer retirement benefits.

For new hires, gone were the company-funded pensions, replaced by 401(k) retirement accounts. Gone were the Cadillac health care plans for retirees.

"It was becoming harder and harder to justify keeping them," says Masters.

The car companies were in such poor financial health that two of the Big 3 automakers declared bankruptcy in the aftermath of the 2008 financial crisis.

Workers retire long before they're eligible for Medicare

On the picket line outside the Ford plant in Wayne, Mich., autoworkers who are nearing retirement worry about their colleagues hired after 2007.

"This is not just for me but for all the new people coming in," says Mario Williams, a quality control inspector who's planning to retire in a year.

Health care in retirement is a particular concern among autoworkers, given how relatively young many of them can retire. Those who enter the factories just out of high school could retire by age 50, well before they're eligible for Medicare.

Barrymore from the paint department says she's grateful for the excellent health coverage autoworkers get while they're on the job, with no premiums and low co-pays.

She is also thankful that as a legacy worker hired before the concessions, she will continue to get excellent coverage in her retirement. She wants younger workers to have the same peace of mind.

"That's our legacy. They need to come up the same way we did," she says.

Automakers are offering to sweeten retirement

The car companies have all offered to sweeten their retirement plans during negotiations. GM, for instance, has proposed increasing its 401(k) contributions from 6.4% to 8% of employee earnings, and in addition, set aside more money that employees can use to purchase health care after they retire. Stellantis has offered the option to purchase an annuity, which would provide guaranteed income for life.

"They are getting creative in terms of how they're trying to stabilize people in their latter years," says Masters of Wayne State.

But the UAW has so far indicated that the offers on the the table aren't good enough.

On the picket line outside Stellantis' Toledo Assembly Complex, Chris Snyder is doubtful that his company will agree to provide lifelong income through pensions, given how much longer people are living these days.

"Sure, you've given them 30-plus years of your life, but another 20 years that you're going to live — I mean, that's a long time to be asking for," he says.

Still, he sees room for improvement with their 401(k) contributions. Stellantis contributes 6.4% of employees' earnings up to 40 hours a week, but Snyder says workers at the Jeep plant routinely put in 60 hours a week.

If nothing else, he says, he wants the company to make retirement contributions based on actual hours worked and offer an additional matching incentive to encourage younger workers to save.