via Wall Street Journal
Many big companies are pushing to cut spending on employee benefits—from pensions to health insurance—and could face labor strikes as a result.
In all, major employers have about 400,000 union workers whose contracts are up for negotiation this year. They include the Detroit auto makers, whose workforces have a combined 140,000 members of the United Auto Workers; a group of railroad operators including CSX Corp., with 142,000 union employees; and telecom companies like Verizon Communications Inc., which is in talks with about 40,000 wireline workers.
Most labor talks involve some head-butting over benefits. But what’s different this time, corporate finance chiefs say, are a looming “Cadillac tax” on health-care plans and pension burdens that are dragging down profits.
At New York-based Verizon, executives want to “redesign and reshape” health plans in a bid to cut overall cost, said Fran Shammo, Chief Financial Officer.
Verizon also aims to rein in pension expenses. Its obligations for defined-benefit pensions—the kind that guarantee retirees a set payout—totaled $25.3 billion at the end of 2014, up 10% from 2013.