General Motors and Ford Motor Co. announced some changes to white-collar workers' benefits that shifted many employees' worlds in the process.
The companies say the changes are being done to remain competitive in costs and attracting and keeping top talent, but analysts see it more as a cost savings, and some employees aren't sure what to make of it.
While neither company is messing with pay cuts or reductions to bonuses, the changes to some other benefits were jarring enough for some white-collar workers to reach out to the media to share the news. A salaried worker from GM and one from Ford told the Detroit Free Press the changes concern them and their colleagues. Both people spoke on the condition of anonymity for fear of losing their job.
GM's change came when it told white collar workers on Oct. 8 that it will drop Blue Cross Blue Shield for its 40,000 salaried employees in the United States and switch them all to Aetna starting Jan. 1. That switch worries some employees who fear that their regular doctors might not be in the new Aetna network, the person at GM told the Detroit Free Press, adding that the family plan he has is going to cost him $45 more per month with Aetna.
In Ford's case, the company sent an email to employees the same week saying it was "modernizing" its vacation policy to simplify it and make Ford more competitive. In the email, which was obtained by the Detroit Free Press on Oct. 9, Ford said it was tweaking paid time off (PTO) to offer more vacation days sooner than it had in the past to many employees.
But Ford also is ending the program that allowed people to purchase vacation days – the changes are all effective Jan. 1. That last point shook some employees who need to buy extra days off each year so as to have enough time to visit family overseas, the person who works at Ford told the Detroit Free Press.
Still, experts say the moves are to be expected given rising costs employers face for some benefits.
"Corporations in general are scrutinizing labor costs to find efficiencies to reduce cost and free cash for investment," Marick Masters, a labor expert and professor emeritus at Wayne State University, told the Detroit Free Press. "Consolidation and standardization in administering selected benefits such as health insurance is one way of promoting cost-efficiency. Eliminating the PTO practice of allowing salaried employees to purchase PTO days is another way to standardize operations and reduce the costs of administering the PTO benefit."
Competitive or a risk?
But Ayalla Ruvio, associate dean of MBA and master's programs at Broad College of Business at Michigan State University, said companies must consider their benefits as a marketing tool to attract potential talent. She said GM and Ford are likely trying to control costs while making their benefits packages more competitive, but it's risky.
"I think there's a disconnect between what companies consider competitive and what employees actually value," Ruvio told the Detroit Free Press. "From a marketing perspective, you can't create value without understanding your target audience. The same principle applies to employees. If you're redesigning benefits without understanding what matters most to your workforce, you risk getting it wrong."
Erik Gordon, University of Michigan's area chair of Entrepreneurial Studies at the Ross School of Business, put it this way: "Ford and GM are becoming more like other industrial companies that have rules and enforce them. The lax, lush ways are disappearing, at least for mid-level people."
The rising cost of health care
GM's move might reflect a nationwide trend. Health benefit costs in general are rising much faster than inflation and wage growth, according to Mercer's 2025 National Survey of Employer-Sponsored Health Plans. It said the average cost per employee for health care in 2025 rose 6% to $17,496. It projected that the cost will rise even higher this year, to 6.7%, pushing the average annual cost per employee to $18,500. The percent rise is the highest in 15 years.
The report points to an increase of 9.4% in spending on prescription drugs in 2025, due in part to rising use of costly GLP-1 weight-loss medications. The higher costs impact both health plan members as well as plan sponsors, the study said.
"With mounting pressure on health care budgets, employers are implementing short-term cost-cutting measures — but many are also seeking to preserve health care affordability with longer-term strategies designed to slow future cost increases," the study read.
GM spokesman Kevin Kelly said the automaker made the move, in part, to create consistancy in its health care plan across the company so that all locations would offer the same program. When asked whether doing so also helped GM trim costs or create other financial efficiencies, Kelly declined to comment or to provide any further insight on GM's plans for salaried workers for this article.
Instead, Kelly emailed the Detroit Free Press the following statement: "GM evaluates its relationships with all our health care providers and vendors to ensure we’re offering the right level of care and support for our employees. These changes will help simplify employee support across the country and should have little impact on employees and their current providers.”
Masters viewed the move as a step toward consolidation and standardization in the administration of health insurance, adding that, "GM self-finances its health care but uses third parties to administer the system."
Still, when a company changes health care providers, especially a big company such as GM, they typically do so because they can negotiate better rates with a new provider, said Peter Berg, professor of employment relations at the School of HR and Labor Relations at Michigan State University.
"They may have just gotten a better deal with Aetna. They say they want consistency, that may be true, but it may not be the main driver," Berg told the Detroit Free Press. "They can take the high road with that and say it’s not a way to cut costs for us. They can say we get a neutral or better plan."
But for GM's employees, Berg said, "I think it creates uncertainty. People wonder: 'What’s going on?' "
'25 days is enough time'
Across town at Ford, the Dearborn-based automaker told its salaried employees by email that it was tweaking its vacation policy based on employee feedback and to "benchmark our offerings so we can retain and build the best team." Ford said its new and modern policy will both "simplify the structure and make it more competitive" without reducing anyone's vacation allotment, adding that "many employees will see an increase."
According to Ford's 2025 Annual Report, the company has about 75,000 salaried employees globally. It has about 31,000 in the United States.
The new vacation policy will allow most salaried employees to earn 25 days of vacation annually once they hit 15 years with the company, sooner than the previous policy did. Most salaried employees start at Ford getting 15 paid-time off days for the first year. Then, year two through 14 they will get 20 days a year. After 15 years, they get 25 days. For upper managers, they get 25 vacation days annually from the first day on the job.
The real change that had workers buzzing is Ford's decision to end the Purchased Vacation plan, citing that "benchmarking showed this is an uncommon market practice."
Ford spokesman Dave Tovar declined to answer specific questions about why Ford changed the plan. He told the Detroit Free Press in an email: "Ford regularly reviews our benefits to make sure they remain competitive and support our employees' health and wellness. We're updating our U.S. salaried time-away policies to simplify them and make them more competitive. It’s important to note that no employees will see their PTO reduced. In fact, a large percentage of employees will see their PTO days increase. Also, a very small number of employees actually purchased additional vacation time. It’s an outdated benefit and the increase in PTO for many employees addresses the reason the option was originally offered."
U-M's Gordon agreed that the purchase of paid-time off is an antiquated practice, saying, "Relatively few companies allow employees to buy extra days off to extend vacations."
Gordon said the change in allowing people to be eligible for 25 days of PTO sooner is the bigger deal because "people won't be able to buy longer vacations, but lots more people will get the 25 days."
Both Masters and Berg see the PTO changes as Ford's way of simplifying its administration procedures and attracting talent. Masters said reducing the number of years before an employee is eligible for 25 paid-time off days may create an incentive for employees to stay with Ford longer.
Berg said the plan is flexible enough to allow Ford to place a "super talented person" hired from another country in a classification that automatically starts them with 25 days off so they have ample time to travel overseas to visit home each year.
"It basically says, 'We think 25 days is enough for you to travel home, but we’re not too keen on people buying out more days, it’s too disruptive," Berg said. "Those are days they are not working, and that’s a cost to the company too – even if people pay for that time off."
But Ruvio said there are those who could lose something that matters to them.
"Take a working parent who relies on purchasing extra vacation days during school breaks," Ruvio said. "That flexibility may be worth far more to them than a modest increase in another benefit. We also know from consumer psychology that people feel losses more strongly than equivalent gains. So removing an existing benefit can create more dissatisfaction than adding a new one creates goodwill."
'Welcome to the normal economy'
Ruvio said the key consideration in the changes rests upon the idea of: Will they make Ford and GM more competitive in attracting and retaining talent? She warned that the companies must be careful because changing benefits that employees value can undermine the competitive advantage the companies are trying to build.
"Employees don't just evaluate benefits in terms of dollars," Ruvio said. "They care about how those benefits fit their lives and give them flexibility. So companies that compete for employees know that benefits are an important part of what makes someone choose to join a company or stay with it."
Masters believes Ford's and GM's changes will help them streamline operations and provide more consistency. He said that kind of "organizational security may aid recruitment and retention, which can boost cost efficiency."
Berg said neither Ford's nor GM's changes struck him as a "major reduction in benefits" to the white-collar workforce, but rather these are moves many companies make to stay up to date on industry trends, operate efficiently and manage costs.
“It’s a little more freaky because these are big companies that are really established and employ a lot of people and who have always been good providers," Berg said. "Now … salaried people feel their world is shifting a bit. Well, welcome to the normal economy. These things happen.”
Jamie L. LaReau is the senior autos writer at USA TODAY Co. who covers Ford Motor Co. for the Detroit Free Press. Contact Jamie at jlareau@freepress.com. Follow her on Twitter @jlareauan. To sign up for our autos newsletter. Become a subscriber.
This article originally appeared on Detroit Free Press: GM and Ford tweak salaried workers' benefits. Here's the fallout
