The nation's Big Three automakers announced yesterday that they will offer full health benefits to the same-sex domestic partners of their nearly nearly 500,000 U.S. employees, a move hailed by gay rights activists as a potential tipping point in persuading other "old economy" employers to do the same.
Ford Motor Co., General Motors Corp. and DaimlerChrysler Corp. jointly announced that, starting Aug. 1, they will offer the benefits to the domestic partners of all employees who had shared a "committed relationship for no less than six months." The benefits are not being offered to unmarried heterosexual couples.
In a joint statement, the automakers said "offering health care benefits to same-sex domestic partners is consistent with each organization's commitment to diversity in the workplace and is responsive to competitive trends among the Fortune 500 companies."
The companies see the move as a way to help attract skilled workers in an increasingly tight labor market. Industry sources predicted that major foreign carmakers with operations in the United States would soon follow.
Monica Emerson, director of diversity for DaimlerChrysler, said offering the new benefits, aside from being "the right thing to do," was an effort to attract the best workers. "We really don't know whether anyone has ever decided not to join us because of the lack of benefits, but clearly by taking this position we won't be taking that risk," she said.
Emerson said "all corporations who want to be competitive will find themselves forced to cast wider nets to attract the best and the brightest."
David Murphy, vice president of human resources at Ford, said the new benefit was saying to prospective employees, "Look, we are a diverse company, and we do recognize not only race and gender but sexual orientation." He said Ford was sending a recruiting signal to the labor force.
Ford estimates its additional cost of the new benefit at less than $5 million a year. Ford's annual health-care budget is $2.4 billion.
Although a number of major corporations--including Lotus Corp., Microsoft Corp., Walt Disney Co. and International Business Machines Corp.--already offer domestic-partner health benefits, the announcement by the three automakers is the first time the major players in a single industry jointly took such action.
"There's really nothing comparable," said Kim Mills, educational director of the Human Rights Campaign, a gay rights group that has been pressing the health-care issue. "We've never seen an entire industry announce domestic partner benefits on the same day."
Major airlines such as United, American and US Airways have also adopted same-sex benefit policies, but the action by the auto companies "will be an enormous boost," Mills said. "The auto industry is not viewed as socially progressive when it comes to employment policy. I thought when the airlines went, that was huge, but this tops that," she said.
A spokesman for the United Auto Workers said the new benefits were in keeping with the union's history of negotiating new benefits for the American work force. The UAW had proposed the benefits in last year's contract negotiations. "Here's the heart of the old economy industry and we're doing it," he said.
Winning domestic-partner employer benefits has been a top priority of the nation's gay rights groups for several years.
Mills said approximately 3,400 employers now offer domestic partner health benefits. Lotus, the Boston-based computer software company, was the first major publicly held corporation to offer the benefits, nearly a decade ago. Since then, other big-name companies and organizations, including The Washington Post Co., have followed suit. Mills said she could not estimate the total number of employees that are eligible to take advantage of the benefit.
The Society of Human Resource Management said a benefits survey of its members last month showed that approximately 10 percent of the organizations they represent offer health benefits to same-sex domestic partners. It said that was up from 7 percent in 1999.
An SHRM spokeswoman said surveys show that larger companies, those with more than 5,000 employees, were more apt to offer the benefits than smaller employers. A 1997 survey by the group specifically focusing on domestic partner issues showed that 85 percent of employers that offered the benefit said their health-care costs remained about the same afterward.
A 1999 Kaiser Foundation survey said that 18 percent of all U.S. employers had some form of domestic-partner benefits.
Although none of the car companies would estimate how many people might be affected by the change, a GM official said it is estimated that on average about 1 percent of the industry's work force is gay or lesbian.
The three automakers agreed to study the benefit idea as part of their contract agreement last year with the UAW, which had proposed that each company set up a joint labor-management committee to study the economic feasibility. Yesterday's announcement was the result of the committee's efforts.
DaimlerChyrsler's Emerson said applicants for the benefits will have to file affidavits with the company showing they have had a committed relationship for at least six months, including living in the same household for that period, and other tests of commitment. She said all the information would be kept confidential by the company.
The benefits will cover 100,000 blue- and white-collar workers at DaimlerChrysler, 159,000 at Ford and 204,000 at General Motors.