UAW Talks: Health Care Tops the Agenda as Deadline Nears
September 04, 2007
By Joseph Szczesny 
The United Auto Workers union’s contract with General Motors, Ford and Chrysler expires in just over a week on September 14. While little has been reported publicly on the progress of negotiations, the towering cost of health care undoubtedly is the top issue in the talks.
How health care will be resolved has yet to be seen. And the recent turmoil in the financial markets makes one possible scenario more challenging.
UAW members seem resigned to the idea that they will have to pay more for their health care in the next contract. However, their additional contributions won't address the enormous retiree health-care obligations now weighing on Detroit automakers –- an obligation that has more than doubled in less than a decade despite increased efforts by the car companies and the union to deliver health care more efficiently.
One partial solution that has been floated is the establishment of a VEBA -- or Voluntary Employment Benefit Association. Automakers would contribute money to the fund to cover their health-care obligations, thus moving the bill off their balance sheets. The union then would administer the fund.
Finding the money to finance the VEBA, however, is the challenge. Most analysts assume the automakers could borrow the money and transfer it to the VEBA. Retiring the debt would be less expensive and less noisome than the ongoing funding of uncertain obligations and cost of retiree health-care benefits where new drugs have reduced actuarial assumptions to Swiss cheese.
However, the recent disarray in the financial markets could have a negative impact on an automaker’s ability to transfer its employee health-care liabilities to an independent trust.
Indeed, the credit crunch already has hurt the automakers’ business, especially segments like GM's mortgage business, now operated with Cerberus Capital Management, the New York private equity firm that runs Chrysler.
GM Chairman Rick Wagoner acknowledged now is not the best to try to raise funds in the equity markets, but he believes the situation is temporary. While he hasn’t said so, UAW President Ron Gettelfinger must also be concerned about the fallout from the credit crunch.
Also complicating matters is the word out of Chrysler it does not want to be part of a VEBA, leaving GM and Ford on their own. Chrysler’s apparent resistance is the fact that Cerberus, already in debt to purchase the automaker, doesn’t want to take on even more debt.
“I think Gettelfinger will look at the numbers [the companies] have prepared and decide whether the VEBA improves the security of UAW members,” said Harley Shaiken, labor expert at the University of California-Berkeley. “He could look at the numbers and decide it doesn't.”
Posted by Michelle Krebs at 5:22 AM under Analysis , Chrysler , Featured , Ford , GM | Comments (4) | digg this | Seed Newsvine
The UAW Administration has a lousy record. In the last two years they have negotiated Wage Cuts and COLA Diversions along with jacked up Health Care premiums and out of pocket expenses for retirees. They have encouraged Local Bargaining Committees to approve COAs that outsource good jobs and set up two tier pay scales that divide the membership. They have fostered work rule changes that set the union back 70 years. What surprises are in store for us in the 2007 National Agreement? Watch for these Red Flags.
Red Flag #1: The rush to ratify. What’s the rush? Why don’t they want us to kick the tires and look under the hood? We deserve at least a week to consider a contract they have been negotiating for two years.
Red Flag # 2: The Signing Bonus.The bigger the bait, the bigger the hook. Every signing bonus is back loaded with wage cuts and COLA Diversions, and job eliminations costing us far more than any bonus they may offer.
Red Flag #3: Two Tier Wages and Abuse of Temp Workers.Two tier fractures solidarity and undermines retiree’s security. It’s a divide and conquer plan. Restore dignity to our union by making Temps permanent and equal members with full seniority.
Red Flag #4: VEBA. The companies want to “strip and flip” our fully company-paid health care and replace it with a limited fund. They want a new VEBA that shifts all the risk onto the union. Whatever the companies stand to gain, workers stand to lose. Don’t gamble retirement security on the stock market. If the companies are in such bad shape, where are they getting billions of cash for VEBA?
Red Flag #5: Supplements to be Negotiated After Ratification.In the 2003 Delphi and Visteon Agreements a Two Tier Supplement was negotiated after the ratification. Members were not permitted to ratify the supplement. Ratifying an unfinished agreement is like signing a mortgage before you know the interest rate.
Red Flag #6: COLA Diversion is a Wage Cut in Disguise.
Restore the principles that won respect for the UAW: Solidarity, Equality, Democracy.
If you see a Red Flag, VOTE NO!
Posted by: Wild Kitten | September 05, 2007 at 8:52 AM
UAW VEBA is a royal retiree sell out
This link on VEBA may be of interest to you.
http://unionreview.com/insights-analysis-uaw-betrays-autoworkers
Posted by: MICHAEL WESTFALL | September 05, 2007 at 11:48 AM
I had 25 years of seniority at Champion Spark Plug company when I retired. I also had 17 years seniority as a member of the UAW International Union staff.
The UAW has and will continue to negotiate agreements that best serve the membership and the do not bend companies over the barrel until they collapse.
Its easy to negotiate from a comfortable armchair on the sidelines. It's a little different when you have a Research staff who know what a companies financial picture actually looks like. The IEB has to take care to not "kill the goose" that has laid the "golden" eggs all the decades past.
GM Ford Chrysler, Aerospace, Big Truck - none of them got into the lousy financial position they are in because Americans or the world are hammering at the dealers doors demanding to buy our products. Quite the opposite
The early leadership of the UAW knew when to hammer management, and when to back off. To use a simple example - I can ride a horse hard and fast until it drops dead. Or I can ride it carefully and not exhaust it, so that I have a reasonable chance of reaching my destination. And while all this is going on I have to allow the horse to water and feed from time to time.
If I'm relentless and drive the animal, I'll likely not make it home at all. If I'm smart and ride with forethought about where I'm want to go, I can make it home on time.
The UAW achievied labor contracts that were the envy of American industrial workers not fortunate enough to be organized. The world has changed, the UAW has to adapt or die. Striking until the plant, factory, mine, or mill shuts down doesn't perserve anyone's job. Striking until you have more line crossers than pickets doesn't perserve anyone's union.
No union means a return to the 20's and 30's - the foreman rules the work place floor - bitch about it and you're out the door.
Working men and women have to be smarter than that. Two steps forward, one step back. Maybe we have to take that step back... but our best times will come again.
That's the spirit of American workers - don't blame the UAW - if it didn't exist, we wouldn't be complaining about it - you would just be working for $10 or $12 dollars an hour like Wal-Mart warehouse workers and be happy to get that.
Posted by: Al | September 10, 2007 at 11:07 PM
GETTELFINGER VEBA DELIVERS UAW RETIREES TO GATES OF POVERTY?
Well Al, since you had 17 years on the international staff you are able to get a double pension, unlike the hourly workers who will pay your way. Lucky you!
Didn’t Gettelfinger already slice up retirees with the help of a couple of blue collar brown nose turn-coats in 2005 that went to court to void the legal ramifications of the contract pertaining to fellow retirees? Didn’t they together already force struggling retirees to reduce their feeble pensions to pay for badly needed health care?
Weren’t retirees supposed to be untouchable until 2011?
Retirees are not allowed to vote, so how many times will this gullible Gettelfinger want to reopen the contract to again attack defenseless forgotten retirees who fought the good fight for today’s workers? What kind of unionism is Gettelfinger and his tiny group of three vice-presidents subjecting the UAW”s hundreds of thousands of retirees to?
Rewarding workers with bonuses to devastate and sell-out innocent retirees and their spouses won’t solve the problem. What kind of tacky solidarity and unionism is this?
Gettelfinger’s chump signing bonus is a backhanded swindle that is not comparable to what all retirees will lose going forward. The only ones smiling will be the corporate executives as they cash in their even larger bonuses because they put the big one over this small handful of gullible UAW leaders.
Autoworkers have been demonized and falsely accused when the industry problems have clearly been from huge management mistakes over decades. Workers have given painful concessions and their concessions have funded the building of more foreign plants, which translated into the evaporation of two thirds of their jobs. Gettelfinger has been around for 30 years. Where was he as these jobs disappeared?
The company’s promises to guarantee employment have been proven to be empty lies that are not worth the paper they are written on. Don’t workers know this by now?
These shocking retiree cuts will free up funds for further corporate foreign expansion. Remember this in five years after Gettelfinger and his little group of three captain vice-presidents, who are together doing this to hundreds of thousands of trusting retirees, are comfortably retired on their very lucrative, comfortable and secure pensions. Are local union presidents supporting their retirees? If not, why not? Ask them.
This tiny handful of people, who call themselves UAW leaders, have refused to get off their cowardly yellow knees and grow a backbone. Their groveling has been an embarrassment to union solidarity, which has served to destroy the cause of labor as they disrespect, attack and sacrifice their powerless retirees.
Silence is not golden on this gut-wrenching contract. Read closely, copy and pass on the following profoundly important links …now.
http://michaelwestfall.tripod.com/id107.html
http://michaelwestfall.tripod.com/id110.html
http://michaelwestfall.tripod.com/id16.html
http://michaelwestfall.tripod.com/id6.html
Posted by: Kathy H. | September 22, 2007 at 1:08 PM