| GM, UAW Reach Unhappy Medium Over Medical Benefits |
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| Written by Amy Pachla | ||||
| Friday, 05 October 2007 | ||||
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It had been thirty seven years since General Motors had seen a nationwide walkout by the United Auto Workers union. That particular streak came to an end on Monday, September 24th at 11:00 am. The UAW staged a complete walk-out strike against the automaker over who would be in charge of retiree medical funds.
General Motors had been in control of their employees’ health care plans, setting aside $18.9 billion dollars for medical expenses. This amount includes money for the benefit of retirees; and the Detroit News reports that as of 2005, 75% of GM’s medical expenses were solely for the benefit of retirees and their dependents (which GM also covered under their retiree health plan). Prior to the walkout, GM was paying more medical coverage to people over seventy five than people under twenty five. As of Wednesday, September 26th, however, this is no longer GM’s problem. In the strike settlement, GM agreed to hand over control of the retirees’ medical insurance program. Settling the strike, however, hasn’t even come close to solving the problems on either side of the table. GM, while it has been able to divest itself of nearly $50 billion in future liabilities, has lost the ability to claim the billions of dollars currently in the medical fund as an asset. This has caused GM’s stock prices to fall, as well as bringing even more cutbacks and layoffs into view on the horizon for the automaker. Add to this the fact that the UAW works with all the American automakers, and the entire industry is left to teeter on the edge of possible catastrophe and wonder which way they’ll fall. Things look no better on the union side of the equation. General Motors retirees are already calling shenanigans, saying that the UAW vote is a “sham” and will result in de facto cutbacks to UAW retiree benefits. The negotiations were closed to the members of the UAW, a move that left many retirees angry. “In effect,” wrote one retiree from UAW Local 774 in New York, “our so-called ‘Union Leader’ Ron Gettelfinger did what Ronald Reagan, George W. Bush and the rest of the Neo-Cons have been trying to do for years: take away the voting power of the working class.” Many retirees see this as an attempt by General Motors and UAW leadership to collude in slashing employee health benefits. Settling the strike only serves to start the lines rolling and the paychecks coming again. GM can no more afford an extended shutdown in the current economic climate than their employees can afford an extended absence of income. Everyone, however, is playing ‘wait and see’, with the financial well-being of an entire state and an entire industry held in the balance. This article cites as sources:
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