Headlines today focus on its deal with Dana Corp, the bankrupt autoparts maker. They reached a tentative agreement with two main points: a one-time mega payment to a trust fund that will manage retiree healthcare, and a two-tier wage system for new workers.
The company expects to save more than $100 million per year by shifting the responsibility of retiree healthcare to a union-controlled trust fund and establishing a two-tier wage system. Dana will put a one-time payment of $800 million into the trust fund and says retirees and the unions should not need to put any more money toward the plan...While analysts constantly speculate that the newest labor deal "could serve as a template", it seems like this model might actually gain some widespread traction:
...Dana's deals, reached with the Steelworkers and UAW, will require a contribution of $700 million along with $80 million in stock to the trusts, which will take over obligations for retiree healthcare and long-term disability coverage for employees...
... The settlements also include four-year extensions of Dana's contracts with the two unions at its plants in the U.S. They cover about 8,000 workers, or half of its union employees.
The automakers also are studying a new contract between Akron, Ohio-based Goodyear Tire & Rubber Co. and the United Steelworkers union with a similar healthcare trust fund.That last point is critical. With healthcare prices skyrocketing, it's not hard to imagine that lump sum not being enough to cover the needs of long-time workers dealing with normal aging as well as the repercussions of physically taxing jobs. Hopefully smart investment can help to counteract that.
Goodyear estimated it would save $275 million over the next three years by setting up the trust fund. The company made a one-time $1-billion contribution to the fund.
The trust funds are relatively new and untested. Some Goodyear union workers have criticized the idea, saying they fear the trust fund is underfunded.
With all these deals centering on healthcare, companies' inability to pay for it (let's forget for a moment the huge bonuses they pay out to their executives) and the shift in responsibility to employees, what happens if/when we get some kind of at least partially government funded universal healthcare? Granted that a kind of payroll tax on employers and high earners would be instated to help pay for it, but that payroll tax would be much smaller than what they pay today, especially as costs go down as pharmaceutical companies and insurance companies can't price gouge. What happens to these deals? Massive renegotiations? So much of the money spent on healthcare, especially retiree healthcare, will now be available for higher wages and more job creation. It'll be a huge fight, I'm sure, to get companies to use the new funds for that, though their efforts to fight for some kind of universal insurance is potentially promising.
Speaking of union forays into the fight for universal healthcare, the USW held a candidates forum this week in Ohio. Edwards, Biden and hometown boy Kucinich spoke the first day.
I'm soon going to give a much more detailed analysis of each candidate on labor, but for now, here's a little taste.
Edwards: Talks about real labor and environmental standards in trade agreements that are actually enforced, explained how outsourcing and labor are so important to him because his father and his larger community lost their jobs when their textile mills closed and outsourced. Questions false promise of "re-education" of long time workers. Mentions Green Blue Alliance, a Sierra Club and USW environmental jobs initiative. And as a feather in the cap of this blog, says American people deserve a President that will "stand with working people".
Biden doesn't provide video, but he talks about the importance of labor in building the middle class, and manufacturing can be revived by investing in infrastructure such as bridge building. Says Democratic politicians need to replace "working people" with "union" in their rhetoric (I understand the intention, but it's of questionable strategy in many ways)
Kucinich: "We hafta cancel NAFTA". Kucinich talked in his hometown of canceling NAFTA and the WTO and creating fair trade deals. He's long had labor's back, coming from Cleveland. The next day, he also ripped into Hillary for this set of miscalculations:
Clinton said any trade agreement that passes should be strictly enforced. She didn't mention the North American Free Trade Agreement (NAFTA), a controversial trade pact that her husband backed.Yikes.
After Clinton's remarks, she did not answer questions from the audience, although the other candidates did -- a fact that caused quite a stir. Depending on the person asked, the explanation was either that she didn't have enough time or she had already answered most of the expected questions with her remarks.
Some union members were disappointed.
"I don't think she's really a pro-labor candidate,'' said Peter Stamich, president of USW Local 2 in Akron. "I think she would have gotten grenades dropped.''
Jack Hefner, Local 2's vice president, said Clinton said the right things, but he was not sure whether she meant them.
Also, RESPECT act post coming tomorrow. I just thought this was more timely.
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