UAW In Deadlock With GM Over Funding Level For VEBA

Main Category: Seniors / Aging
Also Included In: Health Insurance / Medical Insurance
Article Date: 25 Sep 2007 - 7:00 PDT


Negotiators for United Auto Workers and General Motors on Thursday were unable to come to any significant agreements on creating a voluntary employees' beneficiary association that would shift retiree health care liabilities to the union, "open[ing] the door for GM to seek harsh concessions from the UAW," the Detroit News reports. People close to the talks said that if no deal is reached on health care, GM will seek drastic cuts in wages, benefits and jobs to close the gap with foreign automakers on labor costs (Vlasic et al., Detroit News, 9/21). Ford Motor and GM in August formally asked UAW to assume responsibility for the health care benefits of more than 1.5 million working and retired employees. The companies would transfer retiree health care obligations to an independent trust fund that the union would manage.

Last week, UAW selected GM, which has been the strongest proponent among the automakers of creating a VEBA, as its lead negotiation partner. The GM contract, which expired on Friday, is being extended on an hourly basis. Contracts with Ford and Chrysler Group have been extended indefinitely while negotiations between UAW and GM are under way. Sources close to the negotiations said that GM is steadfast in its stance to contribute no more than 65% of its retiree health care liabilities -- about $32.5 billion -- to the fund, and it is pushing to reduce that number. UAW is seeking a larger contribution. UAW President Ron Gettelfinger on Tuesday decided to end discussions with GM on creating a VEBA, citing a gap of billions of dollars between the automaker's proposed funding and the union's desired amount (Kaiser Daily Health Policy Report, 9/20).

Negotiations continued until almost midnight on Thursday. Sources said that although Gettelfinger has rejected the latest VEBA proposal, the issue could be reopened in coming days. David Cole, chair of the Center for Automotive Research, said, "I think we're stepping up to real hardball here. GM is going to address the competitive gap one way or the other." Harley Shaiken, a labor expert at the University of California-Berkeley, said, "The issue, to the company, was perhaps several billion dollars. But to the union, it's the security of health care in the future." Local union officials said they were told on Thursday that a strike remains possible and to "be prepared for something" if no progress is made by midnight on Friday (Detroit News, 9/21).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation© 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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