Wednesday, September 26, 2007

UAW Takes Care Of Itself In Deal With GM

It was a strike that was suppose to be about job security, but it looks more like a self-serving plan for the UAW. The AP is reporting on a tentative settlement to the 2-day-old strike against GM by union workers. "The two sides gave no other details, but a person briefed on the contract told The Associated Press that it also would give workers bonuses and lump-sum payments and would pay newly hired workers at lower rates." "GM and the UAW confirmed that the deal creates a GM-funded, UAW-run trust to administer retiree health care."

So the union is going to take charge of a retiree health care plan which GM funds. GM will reportedly shift about $51 billion of its unfunded liability for the retiree benefits to the UAW and contribute $36 billion to fund the trust. The union will be responsible for investing that money and managing the health care plan for 340,000 GM workers. Newly-hired workers will be paid less to deal with a $25-per-hour disparity between what GM labor costs compared to its Japanese-owned competitors, while wages for current workers will remain the same. Bonuses or lump sum payments will be offered to those workers in lieu of annual pay raises over the next four years. Looks like a long-term solution to me. Or not.

5 comments:

Anonymous said...

Shades of Jimmy Hoffa!!!!!
Would you trust the UAW with $36 Billion????????????

Sir Hailstone said...

That's what I said 7:34

Jason said...

I think this is a pretty genius move on GM's part. That way when the Union squanders all the money on BS perks it won't be GM's fault. I just hope all my family that're retired from GM are gone by the time the money runs out.

Anonymous said...

You jerks obviously don't know much about the modern-day UAW. I know it's easy to bash unions, but...this is a good deal. The UAW may be more efficient than GM, business-wise. Not that it's saying much...

This is a brilliant move--for all concerned. It's been in the works for two years. Do you really believe a huge health care trust could be created and shifted overnight?

To gauge the effectiveness of this plan you only have to look at the Japanese markets--where Nissan tumbled today and the Nippon press is awash with stories about this. Finally, the health care burden is partially, or fully, removed form GM's direct obligation.

Health care costs have become huge business liabilities. In the name of global competitiveness, we need national health care now.

Jason said...

I was with you until you got to the national health care bit. Socialized health care isn't working anywhere else why would it work here?

And I'm pro-union, and also willing to say that unions are a big chunk of why the big 3 are losing (or have lost) their competitive edge.