How UAW contracts shaped the lives of Detroit's autoworker families
When my great-aunt Clara Corso died late last year, the 93-year-old suburban Detroiter had never set foot in an auto factory, never pulled a third shift attaching bumpers and wasn't even a “Rosie the Riveter.”
What she was, however, was a post-World War II Italian immigrant, a widow whose final days involved intensive and expensive medical care that was completely covered, at no cost to her surviving relatives, because of what else Clara Corso was: the surviving spouse of a long-deceased, UAW-represented autoworker at Ford Motor Co.
Though he had died 42 years before her, my great uncle Michele’s rich benefits carried Clara comfortably to her grave, thanks to an innovative labor deal struck 17 years ago that still benefits the automaker, its workers and, like my great-aunt, their dependents.
The scope of her benefits surprised the staff at Angela Hospice in Livonia: Though she would only require two weeks of room and board in their facility, an entire seven months of 24-hour care was covered, a cost the facility estimated at $86,100.
That level of coverage wasn’t entirely unheard of, especially for the metro Detroit area — but as staff told us, you just don’t see benefits like that anymore. That coverage level, according to the medical billing department, is considered a unicorn policy.
The need to remain an automaker employee’s widow — as in, the recipient of the lion’s share of his pension — drove every major decision Clara made since the 1980s.
In many ways her life was entirely ordinary. Her garden flourished in the backyard of her Dearborn Heights home, which was always filled with good food and satisfied houseguests. Everyone called her Zia, aunt in Italian. She was everyone’s Zia.
My great-aunt listened to so much over the years; complaints and concerns from my mother and her siblings, and then from me and mine. But she never shared too much; there was a lot about her life that I wouldn’t know until her death this past Christmas Eve.
Early life and the dawn of war
In the middle of Italy’s ankle, two towns rest in the rich agricultural region of Molise — one, Castelbottaccio, dates back centuries before the birth of Jesus. The newer town, Campobasso, 20 miles away, is believed to have been constructed in the Eighth century. My family is from both.
In Campobasso, four years before the establishment of the United Auto Workers and on the other side of the world, Clara Discenza was born to photographer Vittorio Discenza and homemaker Antonietta Niro.
It was in the old town on the hill between the Sannio and Matese mountains, among the Romanesque churches of San Bartolomeo and San Giorgio, that her future husband, Michele, was born.
Any peace in their respective upbringings was cut short by war. My family lay square in the crosshairs of tactical regions at play in Benito Mussolini’s alliance with Adolf Hitler, who sent German soldiers to occupy much of Italy in the opening months of the war.
After a successful campaign to liberate Sicily, Allied forces encountered heavy resistance on their way to Rome. Campobasso suffered Nazi bombardment as the Germans sought to counter the Allied advance northward to Monte Cassino in the fall of 1943. Clara, then 12, lived through the German artillery fire that destroyed many of Campobasso’s public buildings and added further cracks to its cobblestone streets.
Fortunately, my great-uncle Michele did not fight. He was exempt from service in the Italian Army, either because he was a student or the only man in his family.
New life in America
In 1955, Michele married Clara and left his bombed-out village, eventually reaching Ellis Island. From there, he followed his father, Giuseppi Corso, to Detroit as part of the wave of Italian emigres who found work in the ever-growing automotive industry. He would work at the same company as his father: Ford.
Charles Ballard, a professor emeritus of economics at Michigan State University, said the quality of life that Michigan’s autoworkers secured astonished employers around the country.
“It was once true that people would graduate from Lansing Sexton High School and almost literally walk across the street to a GM plant where they would make upper-middle class wages and benefits,” he said.
And Ford appeared to be leading the charge on worker protections. Henry Ford II signed the first significant funded pension program in the UAW in 1949. Supplemental Unemployment Benefits — which are tax benefits paid to terminated employees due to training, illness or injury, force reductions or temporary layoff — were reached the year Clara and Michele married, in 1955.
Soon, the contracts between the UAW and the automakers would dictate so much of my family’s future security.
By the time my great-aunt arrived from Campobasso in 1959, she was entitled to an ever-growing list of benefits hard fought and won by people she would never meet.
One such benefit, hospital-surgical-medical care premiums for the surviving spouse of a retired worker, or as would be Michele’s case, a worker eligible for retirement benefits at the time of his death, were negotiated into the contracts soon after Clara’s arrival in America.
Life on the line
For most of the '60s, my great-aunt and great-uncle lived in Detroit. But during the unrest of 1967, a garbage can was thrown through their window. It was no Nazi invasion, but enough turmoil for the couple to flee the city.
Pooling their life savings, my great-aunt and great-uncle left Detroit for Dearborn Heights in 1969. Michele joined the Dearborn Stamping Plant as an inspector. Opened in 1939, the sprawling 35-acre facility was located just 10 miles from the couple’s new home.
Clara would remain in that house for the rest of her life.
By 1967, autoworker spouses and children qualified for in-patient nursing home and convalescent care up to 730 days. These protections, granted at a time when the auto industry boomed and no hint of competition from foreign automakers crested the horizon, would not be considered burdensome for the Detroit Three for decades. In 1962, General Motors had 11.5 active employees for every retiree or surviving spouse in its pension plans, NPR reported in 2023. And the Baby Boomer generation was far from retirement.
One year after my great-uncle clocked in for his first shift at the stamping plant, UAW President Walter Reuther and his wife, May, died in a plane crash on Black Lake. His death marked a serious blow to the morale of the labor movement.
Even back in the 1950s, when Reuther first began negotiations with automakers on health care benefits, he could guess it would one day add great expense to their bottom lines. His belief, according to Harley Shaiken, a labor expert and professor emeritus at the University of California, Berkeley, was that once the automakers got a taste of how much health care cost, they would support the UAW petitioning Congress for universal health care.
“Reuther, and the key people around him, had been around the block. They were realists. Their goal was to get health care from the companies,” Shaiken said. “But Reuther put this in a national context. A benefit of bringing health care to the bargaining table would make the companies more likely to support the unions in Washington.”
Though he was not solely responsible, Reuther played a pivotal role in Michigan’s lasting legacy as a leader in health care coverage and protections, according to Ballard.
“Michigan is tied for fifth for the highest percentage of residents with health insurance coverage, whereas per-capita income, we’re as low as 39th,” Ballard said. “We punch well above our weight in health insurance coverage. If we hadn’t gone along with the expansion of Medicaid under the Affordable Care Act, we wouldn’t be as high, but it was the auto industry that started it.”
Alongside other notable leaders, Reuther “came on the scene in the 20th century at a time when the world was fraught with perils,” UAW President Walter Dorosh said of his passing in an obituary published by the Ford Facts newspaper. “Because there was a Walter Reuther who came our way, the world and its people are richer in human and Christian spirit and enjoy a better quality of life.”
A better quality of life
In 1982, the industry faced unprecedented turmoil amid competition from fuel-efficient Japanese cars. U.S. automakers lost an estimated $4.2 billion in the first year of the decade, followed by the largest loss in the history of the domestic auto industry, the Washington Post reported. The sales downturn resulted in corporate operating losses, kicking off the cycle of layoffs, unscheduled contract reopenings and salary cuts for nonunion white-collar employees.
Alongside automaker losses, UAW membership slid — to 1.2 million members in 1980 from record highs of 1.5 million the year before.
Ford, General Motors and American Motors urged the UAW to consider labor cost relief, saying the premium benefits secured in the previous decades put them at a competitive disadvantage.
But in 1982, amid this chaos, Michele was dying of lung cancer.
In many ways, my great-aunt never recovered from Michele’s passing later that year. All she ever told me was that she hated how he snored; but after he died, that was the sound she missed most in the world.
And yet, her life was far from over.
New love
In 1986, Clara met Dominek Giannangeli, a tool-and-die craftsman, while visiting her mother-in-law in a nursing home. He, too, was an Italian immigrant, and a smoker. His nephew, David Craig, became like family.
The only person who could get away with smacking a cigarette out of Dominek's hand was Clara, David said. A Valentine’s Day card I found in her office read, “I’m glad I found you. I love you even when you argue with me.”
They never married but stayed together until 1997 when he died of diverticulitis. Had they married, she would have lost her benefits.
After Dominek passed, Clara began seeing his former brother-in-law, Douglas Craig, a former attorney and David’s father. It’s hard to say if they dated; both had recently lost a spouse or, in the case of Dominek, a spouse-like partner. I have no memories of Dominek, but Douglas lives in the fringes of my memory. Broad, happy face, red nose. They, too, would never marry, but remained close. He passed away in 2008.
Bankruptcy cutbacks
Meanwhile, my great-aunt lived her life. She purchased vegetables on sale and made her own pasta, soup, cookies and limoncello. Her cigarettes stayed in the bathroom, smoke curling out the window and drifting over the neighbor’s fence. She put them out in a golden ashtray commemorating Ford's 75th anniversary, stamped at the very plant where her husband had worked.
I knew nothing of Dominek except as a name my mother occasionally mentioned when she talked about the past. I didn’t even realize at the time when Douglas died.
Yet brewing in the industry was a change, a small shift in an accounting standard, of all things, that would alter retiree and spousal benefits forever.
At the end of 1990, the Financial Accounting Standards Board instituted Rule 106, which required nongovernment entities to report future liabilities for all retirees. Once this accounting practice showed up in automaker earnings accounts, the companies’ published liability figures were directly tied to actuarial estimates of their retiree’s lifespans, according to Marick Masters, professor emeritus of business in the Department of Management at the Mike Ilitch School of Business at Wayne State University.
The automakers' liability ballooned — and spooked Wall Street investors, Masters said.
“Auto companies didn’t have any choice but to shift their retiree obligations as much as possible off their balance sheets,” he said.
In 2007, all three automakers created a Voluntary Employee Beneficial Association and eliminated the defined benefit plan pension for new hires. A VEBA is an independent trust that is financed by the companies and the union to fund retiree health care.
The company thought transferring retirees’ health care to the union-operated trust fund could mean savings of $1,200 to $1,500 per car produced, closing the gap on costs against a car manufactured by, say, rival Toyota Motor Corp.
This mattered a great deal to the Detroit Three companies, and not just to compete with rival automakers. GM and other automakers were starting to feel the burden of those retirement benefits. In its 2005 annual report, GM said that for every active employee, the company supported 3.2 retirees and surviving spouses.
Compared with 11.5 active employees for every retiree or surviving spouse in 1962, the tide had certainly changed. The company's health care bill, covering every U.S. employee, dependent, retiree and surviving spouse, totaled $5.3 billion.
Many things had changed since those benefits were instituted. The union, too, had diminished in strength and numbers. From its peak of 1.5 million members in 1979, the union had just 671,853 active members in 2000. Today that number has been halved, to 370,239 as of March 2024.
Masters told the Free Press in 2023 that the liability for Ford’s pension was $44 billion and GM’s was $85 billion in 2007 — while GM’s retiree health care liabilities for hourly workers totaled $46.7 billion.
When the Great Recession crashed across the U.S. financial market, Ford’s record-setting loss of $14.6 billion in 2008 was the worst reported in its then-106-year history.
The union agreed with the companies to eliminate retiree health care and defined benefit pension plans for new hires in their 2007 contracts, he said. To obtain government assistance before bankruptcy of GM and Chrysler in 2009, the union and the companies had to agree to additional labor cost savings and massive corporate restructuring, which continued into bankruptcy.
Watching news stories about the bailout for school was interesting but not concerning, because I did not see how it could affect me. Neither of my parents worked for the automakers. My relatives who did had either retired or died.
Active automaker employees were most affected. Compensation per hour for Ford employees also dipped to $55 from $60 per hour, bringing the company closer in line with Toyota’s $48 per hour.
“The question still remains can the Big Three automakers still afford the wages and benefits it promised to the UAW under the modified labor agreements,” said a January 2010 article from the American Journal of Business Education. “Only time will reveal the effectiveness of these concessionary agreements.”
Final illness
When the VEBA launched in January 2010, more than 860,000 members entered its coverage, according to its website, and was at the time the largest nongovernmental purchaser of retiree health care in the U.S. Due to the bankruptcy, the VEBA came online underfunded and with fewer benefits that the labor force had grown accustomed, like comprehensive dental and vision.
Health care through the VEBA provided less security for union members than when the automakers were in charge, Shaiken said. Fortunately for Clara, the timing of her widowhood grandfathered her into certain benefits she needed at the end.
“The benefits the union won at the bargaining table created real gains for other unions and even nonunion companies, and we’ve lost sight of that in so many ways,” he said. “If we focus on only the wealthiest Americans, we've forgotten about the people who keep the economy together and who created our society’s extraordinary productive capability in the first place.”
When Clara was diagnosed with bladder cancer in late summer 2023, she didn’t tell anyone. She was like that. But my mother told my sisters and me because she was the one taking her to doctors' appointments. Smoking ultimately was the culprit, her doctors said. One visit between treatments I caught a whiff of cigarettes when I walked past her bedroom.
“Well, that’s a smoker for you,” my Aunt Lisa said.
Miraculously, at 92, my great-aunt went into remission. This victory, however, was not long-lasting.
In November of last year, Clara entered Garden City Hospital with walking pneumonia, where she was diagnosed with chronic obstructive pulmonary disease. After a week, she returned home. Three days later she suffered a stroke and returned to the hospital. For weeks, she remained in the hospital until she ultimately was discharged to Angela Hospice.
At no point did we consider how my aunt would pay for any of it. Still, the coverage at hospice care came as a surprise. Fifth-level hospice care benefits like my aunt’s — which offer fully covered inpatient care at hospice facilities — are fading away alongside the dwindling policy holders.
Tracy Muzzarelli, who works in finance at Angela Hospice facility and has over 20 years of medical billing experience, refers to it as a unicorn policy for good reason. In most cases, there’s no deductible or copay with the benefit.
“The enormity of the cost of hospice care is quite significant, and the fifth-level benefit in particular is a gem,” she said. “It’s a growing expense for a need that is more in demand than ever before. As a society, we did not prepare for the medical advancements that we’ve had.”
Back in its early days, Muzzarelli said, people didn’t understand the value of this benefit. People didn’t live as long as they do today — and health care has never been more expensive. While the VEBA is much more stable today than during its launch, many benefits like my great-aunt's have been lost in the transition.
And it’s likely the unicorn won’t ever come back.
“The union at the time agreed to not ever negotiate retiree health care benefits again,” Masters said, citing the 2007 contract document from GM that says: “Agreement is permanent; UAW may not negotiate further future retiree health care benefits.”
Jackie Charniga covers General Motors for the Free Press. Reach her at jcharniga@freepress.com.