Big 3 Automakers Offer Gay Benefits

The three largest U.S. automakers announced Thursday that they will extend health care benefits to the partners of gay employees, CBS News Correspondent Jim Axelrod reports.

The announcement from General Motors Corp., Ford Motor Co. and the Chrysler division of DaimlerChrysler AG covers about 465,000 employees and could signal that such benefits will become standard in corporate America.

While it’s expected only about 1 in 100 employees will use the new benefits, the importance, say gay rights advocates, can’t be measured solely by the numbers.

"The manufacturing sector has not been in the vanguard with respect to domestic partner benefits and so to see the big three come out all at once really opens up the door," says Kim Mills, education director with the Human Rights Campaign, a gay rights group in Washington.

If Thursday’s announcement signals a new breeze, it’s one that’s been blowing for a while.

Already this year, companies like Citigroup, Boeing, Motorola, American Airlines, Texas Instruments and General Mills joined the list.

The realities of a tight job market may also have fueled the car makers move.

The automakers said the benefits are a low-cost way to lure new employees in a tight labor market.

David Murphy, Ford vice president of human resources, said Ford expects only about 1 percent of its 159,000 salaried and hourly employees in the United States to take advantage of the benefits, at an extra cost of less than $5 million a year. Ford's overall employee health care bill is $2.4 billion.

"The benefit is saying to employees and future employees, 'Look, we are a diverse company and we do recognize not only race and gender but sexual orientation'," Murphy says. "When we're in the labor market recruiting, we're sending a signal about how inclusive the Ford Motor Co. is."

Mills says about 3,400 companies, including 93 Fortune 500 companies, already offer benefits to same-sex domestic partners. She said the number of companies offering such benefits had grown sharply since the early 1990s.

"One factor is certainly the tight labor market," Mills says. "There's also the rise of openly gay employees, within society generally and in the workplace, sitting down with managers and saying this isn't fair and managers recognizing it's an inequitable system."

Mills also says a San Francisco city ordinance that required companies doing business with the city to offer such benefits has led about 2,000 companies to adopt them.

At GM, the benefits will be offered to 152,000 hourly employees and 54,000 salaried employees. Chrysler will offer the benefits to 71,200 hourly workers and 29,000 salaried employees; other corporate divisions of DaimlerChrysler with U.S. employees -- such as Mercedes-Benz -- will not offer the benefits.

Murphy says Ford had considered whether the move would create a backlash from eployees or customers. The Southern Baptist Convention urged its members in 1997 to boycott Walt Disney theme parks in part because the company offered same-sex domestic partner benefits.

"We decided the business case for moving ahead was a strong one," Murphy says.

"This is really a landmark," says Mills."We've never really seen an industry get together as a group and say we're going to institute these benefits."

The companies say they decided to extend health benefits to the same-sex domestic partners of employees after agreeing to study the issue as part of new contracts made with the United Auto Workers last fall.

Starting Aug. 1, employees can apply to get medical, dental and prescription benefits for their same-sex partners.

The programs do not cover current retirees, but workers and their partners who receive the benefits will keep them after the workers retire.

The offer will not extend to opposite sex domestic partners.