Contract negotiations underway between GM and UAW

imported_Shivetya

Platinum Member
Jul 7, 2005
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Labor experts and automotive industry analysts say the announcement is great news for GM and could mean the parties are willing to negotiate the retiree health care trust -- known as a Voluntary Employee Beneficiary Association, or VEBA. GM has been pushing to move its retiree health care obligation off its books and into a trust run by the UAW.


If you read further on you will find out that for every ACTIVE worker GM has they are paying for FOUR retired ones. The retirement obligations are immense. Through the years the automakers and unions have crafted an unsustainable system, a system that might have worked if the Big 3 could have kept dominance in the US. Even after market share was seen to be falling off and the writing was on the wall (and numbers were available proving how unsustainable the system was) they just kept putting more nails in the coffin.

GM is the strike target. Thats actually an honor. They get to set the base contract that Chrysler and Ford will be handed. The wild card is Chrysler who is under new ownership, non-traditional ownership at that. Ford is just a mess and any contract is going to have to tread lightly not to push them over the edge.

There is over ONE HUNDRED AND FOURTEEN BILLION AT STAKE HERE!

The confrontation threatened the cooperative mood of the talks and underscores the gap between the two sides on the unprecedented fund, sought by GM, Ford Motor Co. and Chrysler LLC to unload $114 billion in health-care obligations. Gettelfinger abandoned the union's five-decade-long insistence that automakers bear all health-care costs after they lost a combined $15 billion last year.

What you are looking at is essentially a run away system of "standardized" health care. Basically they got it all for for free. Getting deductibles into the system and requirements to lead a healthy lifestyle were merely laughed at. The system worked because the customers payed for it. Trouble was, the customers moved on but the system still went under the idea that there were X customers to pay while there were really X-Y customers.

The automakers don't break out specific liabilities for just union retirees, although the union members make up a bulk of the costs. If the difference between the UAW and GM positions were applied using the full $114 liability, the companies would put $63 billion into the fund under their proposal and $80 billion under the UAW's, leaving a $17 billion gap.

The problem I have with whats going on is that it will make it easier to the UAW to appeal to lawmakers for relief should one of the 3 fall short. In other words this scheme they are selling could end up being dumped in our laps as taxpayers. Don't' scoff at the notion. There are numerous retirement systems which we the taxpayer have had to shore up because a lawmaker or two was bought.

Hopefully the big 3 won't squander any financial benefits they derive from this system. Hopefully for the employees and retirees the UAW won't screw up and lose lots of the funds through bad management or misuse. They don't have experience with these amounts of money and already there are all calls for outside supervision.

 

StageLeft

No Lifer
Sep 29, 2000
70,150
5
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Sucks for them. If the union kills GM, GM basically let it happen by getting in bed with the union in the first place.

I'm of the stance that unions should be allowed for private companies but never for public, mandatory organizations (police, fire, medicine), because it gives too much bargaining power to the union and allows them to hold their boss hostage in ways that a private company would not be held hostage because we're talking about more than lost money if they go on strike, but rather compromised lives of those they serve.
 

Triumph

Lifer
Oct 9, 1999
15,031
13
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Thank god that the UAW is finally showing some semblance of understanding of the current automotive market. It just boggles my mind how they can expect to still have everything handed to them on a platter when the companies paying for it are losing money, hand over foot.

I wonder how the new Chrysler ownership is going to handle the UAW. New owners, new mindset, maybe they'll treat the UAW differently than in the past, i.e. not rolling over for them so easily.
 

imported_Tango

Golden Member
Mar 8, 2005
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Originally posted by: Skoorb
Sucks for them. If the union kills GM, GM basically let it happen by getting in bed with the union in the first place.

I'm of the stance that unions should be allowed for private companies but never for public, mandatory organizations (police, fire, medicine), because it gives too much bargaining power to the union and allows them to hold their boss hostage in ways that a private company would not be held hostage because we're talking about more than lost money if they go on strike, but rather compromised lives of those they serve.


The police and fire department employees in Europe sign an agreement stating they give up their right to strike, isn't it the same in the US? I'm sure there's something similar, as I never heard of a strike in life-threatening sectors.
 

StageLeft

No Lifer
Sep 29, 2000
70,150
5
0
Originally posted by: Tango
Originally posted by: Skoorb
Sucks for them. If the union kills GM, GM basically let it happen by getting in bed with the union in the first place.

I'm of the stance that unions should be allowed for private companies but never for public, mandatory organizations (police, fire, medicine), because it gives too much bargaining power to the union and allows them to hold their boss hostage in ways that a private company would not be held hostage because we're talking about more than lost money if they go on strike, but rather compromised lives of those they serve.


The police and fire department employees in Europe sign an agreement stating they give up their right to strike, isn't it the same in the US? I'm sure there's something similar, as I never heard of a strike in life-threatening sectors.
Hmm, that's good. I'm SURE they have striked elsewhere. Damn, I almost remember this exact same dialogue another time and my being corrected and then saying they can or have striked in Canada. I don't know. I should probably see a doctor about my alzheimers.