Ford Motor Co. expects to incur over $1 billion in health insurance costs for its 56,000 U.S. workers in 2020, Bloomberg News reported March 12, citing a source close to the matter.
The estimate could further complicate Ford's contract negotiations with the United Auto Workers, or UAW, over its $11 billion restructuring plan, which involves slashing shifts and about 20,000 job cuts globally.
Fiat Chrysler Automobiles NV and General Motors Co. are also gearing up for contract talks with the UAW. The three carmakers' health insurance costs rose above $2 billion in 2015 and have continued to rise, Bloomberg said.
The negotiations between the three carmakers and the union on contracts that expire in September will begin this summer, and issues like cost-sharing for healthcare benefits may lead to worker strikes, according to the report.
The development comes at a time when carmakers are cutting jobs and undergoing restructuring as the industry braces itself for rising costs of technological transformation, tariff uncertainty and Brexit woes.
General Motors is in the process of laying off 15% of its U.S. salaried staff and closing down five of its U.S. factories. Fiat Chrysler is reportedly cutting nearly 1,400 jobs at its Belvidere assembly plant in Illinois that makes the Jeep Cherokee SUV. Fiat Chrysler, however, is also planning a $4.5 billion investment in Michigan that is expected to create 6,500 new jobs.