GM Contract Talks
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Instructor
Joined: May 2004
Posts: 216
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From: Shreveport Louisiana
GM Contract Talks
GM wants the union to take over responsibility for retiree health care costs using the company-funded trust called a VEBA. That way it will come off the books at GM to give them a better credit rating.
It’s billions of dollars and the security of workers who have put 30 years into the company on an assembly line, so both sides want to get it right.
The UAW has to be very careful before signing on to take responsibility for health care liabilities, because VEBAs at Caterpillar and Detroit Diesel have gone bankrupt.
The benefit of the UAW taking the responsibility is that the funds may be safer. General Motors raided the VEBA for over 1 billion dollars (1) for a 500 million dollar equity purchase in Suzuki (to build a plant) and (2) for a 500 million dollar equity injection into GMAC to show a profit that year. In other words, they looted the health-care trust to build a plant overseas and transfer money from the healthcare VEBA to the stockholders. ...”
Right now at GM there are 4 retired people for every 1 current employee. That is a staggering number and frustrating for everybody. But what are you going to do – throw people away after they worked 30 years for the company? Someday Toyota and Nissan will be facing legacy costs if they stay in business long enough.
Like unions or hate unions – if it was your parents or grandparents that were the retirees being discussed you would want the union to insure they had health care funded as they were guaranteed when they retired from GM.
A significant moment in the history of Detroit's auto industry is being shaped right now. However these talks end, be it in a UAW-GM settlement over the next hours and days, or a strike, or more deals, they cap a momentous two years of painful bankruptcies among suppliers; sweeping job cuts and plant closings at the automakers; unprecedented mid-contract concessions by the UAW on massive buyouts and retiree health care.
It’s billions of dollars and the security of workers who have put 30 years into the company on an assembly line, so both sides want to get it right.
The UAW has to be very careful before signing on to take responsibility for health care liabilities, because VEBAs at Caterpillar and Detroit Diesel have gone bankrupt.
The benefit of the UAW taking the responsibility is that the funds may be safer. General Motors raided the VEBA for over 1 billion dollars (1) for a 500 million dollar equity purchase in Suzuki (to build a plant) and (2) for a 500 million dollar equity injection into GMAC to show a profit that year. In other words, they looted the health-care trust to build a plant overseas and transfer money from the healthcare VEBA to the stockholders. ...”
Right now at GM there are 4 retired people for every 1 current employee. That is a staggering number and frustrating for everybody. But what are you going to do – throw people away after they worked 30 years for the company? Someday Toyota and Nissan will be facing legacy costs if they stay in business long enough.
Like unions or hate unions – if it was your parents or grandparents that were the retirees being discussed you would want the union to insure they had health care funded as they were guaranteed when they retired from GM.
A significant moment in the history of Detroit's auto industry is being shaped right now. However these talks end, be it in a UAW-GM settlement over the next hours and days, or a strike, or more deals, they cap a momentous two years of painful bankruptcies among suppliers; sweeping job cuts and plant closings at the automakers; unprecedented mid-contract concessions by the UAW on massive buyouts and retiree health care.
Team Owner
Joined: May 2004
Posts: 82,175
Likes: 1,319
From: McKinney TX
St. Jude Donor '21-'22-'23-'24
My local newspaper says the ratio of current GM employees to retirees & their surviving spouses is closer to 1 to 5. They say there are about 73,000 active UAW members and 340,000 retirees and surviving spouses.
Source
BTW, thanks for the interesting info. in your post.
The most recent GM-UAW contract, which officially expired at 11 p.m. Central time on Friday, is being extended hour-by-hour as the parties work to reach a new tentative agreement.
Hourly workers returned to work Monday with no disruptions at any of the automakers' 82 U.S. facilities, a spokesman said.
Hourly workers returned to work Monday with no disruptions at any of the automakers' 82 U.S. facilities, a spokesman said.
BTW, thanks for the interesting info. in your post.
Last edited by Vette_DD; Sep 18, 2007 at 12:09 PM.
Racer
Joined: Jul 2005
Posts: 325
Likes: 1
From: Prescott AZ
GM wants the union to take over responsibility for retiree health care costs using the company-funded trust called a VEBA. That way it will come off the books at GM to give them a better credit rating.
It’s billions of dollars and the security of workers who have put 30 years into the company on an assembly line, so both sides want to get it right.
The UAW has to be very careful before signing on to take responsibility for health care liabilities, because VEBAs at Caterpillar and Detroit Diesel have gone bankrupt.
The benefit of the UAW taking the responsibility is that the funds may be safer. General Motors raided the VEBA for over 1 billion dollars (1) for a 500 million dollar equity purchase in Suzuki (to build a plant) and (2) for a 500 million dollar equity injection into GMAC to show a profit that year. In other words, they looted the health-care trust to build a plant overseas and transfer money from the healthcare VEBA to the stockholders. ...”
Right now at GM there are 4 retired people for every 1 current employee. That is a staggering number and frustrating for everybody. But what are you going to do – throw people away after they worked 30 years for the company? Someday Toyota and Nissan will be facing legacy costs if they stay in business long enough.
Like unions or hate unions – if it was your parents or grandparents that were the retirees being discussed you would want the union to insure they had health care funded as they were guaranteed when they retired from GM.
A significant moment in the history of Detroit's auto industry is being shaped right now. However these talks end, be it in a UAW-GM settlement over the next hours and days, or a strike, or more deals, they cap a momentous two years of painful bankruptcies among suppliers; sweeping job cuts and plant closings at the automakers; unprecedented mid-contract concessions by the UAW on massive buyouts and retiree health care.
It’s billions of dollars and the security of workers who have put 30 years into the company on an assembly line, so both sides want to get it right.
The UAW has to be very careful before signing on to take responsibility for health care liabilities, because VEBAs at Caterpillar and Detroit Diesel have gone bankrupt.
The benefit of the UAW taking the responsibility is that the funds may be safer. General Motors raided the VEBA for over 1 billion dollars (1) for a 500 million dollar equity purchase in Suzuki (to build a plant) and (2) for a 500 million dollar equity injection into GMAC to show a profit that year. In other words, they looted the health-care trust to build a plant overseas and transfer money from the healthcare VEBA to the stockholders. ...”
Right now at GM there are 4 retired people for every 1 current employee. That is a staggering number and frustrating for everybody. But what are you going to do – throw people away after they worked 30 years for the company? Someday Toyota and Nissan will be facing legacy costs if they stay in business long enough.
Like unions or hate unions – if it was your parents or grandparents that were the retirees being discussed you would want the union to insure they had health care funded as they were guaranteed when they retired from GM.
A significant moment in the history of Detroit's auto industry is being shaped right now. However these talks end, be it in a UAW-GM settlement over the next hours and days, or a strike, or more deals, they cap a momentous two years of painful bankruptcies among suppliers; sweeping job cuts and plant closings at the automakers; unprecedented mid-contract concessions by the UAW on massive buyouts and retiree health care.
Thread Starter
Instructor
Joined: May 2004
Posts: 216
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From: Shreveport Louisiana
You better hope that GM is here in ten years to keep the pension checks coming. If the government takes over the pension fund, you can expect to get about 40% of your pension and health care will be history. If the union is smart, they will give some additional health care consessions and stop the job banks lunacy now to keep GM solvent. None of us wants to see GM go bankrupt. The playing field is not level. Besides the legacy cost burden that GM carries, they pay a ton of property taxes where most of the transplants are receiving tax abatements. I get a GM pension and health care benefits but I'm very concerned about losing them. GM is in deep trouble and business as usual will not solve the problem.
You should be concerned about losing your benefits. That is the major concern in negotiations now. I am an active employee and do not want to see our retirees face a heavy burden.
I believe in GM and I believe in the UAW. I'm too old to start over with another company. I've just got to hope it will be there when I reach my 30 years of service. (Instead of a pension - I wish GM would have offered a matching 401k instead - at least I'd be sure I'd have something.
)
Thread Starter
Instructor
Joined: May 2004
Posts: 216
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From: Shreveport Louisiana
GM has shrunk considerably from once the largest employer. I'm not sure the public really realizes how much GM has changed over the years.
If nothing else - you have to admire GM and the UAW for not turning their backs on their retired employees.
