Bargainers for General Motors Corp. and the United Auto Workers took a break early Monday amid optimism that they are getting closer to reaching a critical contract agreement.Negotiations came to an end just before 3 a.m. after a marathon 16-hour session on Sunday and Monday, said GM spokesman Tom Wickham.
''GM and the UAW have agreed to take a break, and talks will resume later this morning. We aren't going to comment or speculate on the nature or content of the discussions,'' Wickham said.
He said that all employees were expected to report for work at their scheduled times on Monday.
... One of the local union leaders who asked not to be identified said the main outstanding issues were retiree health care expenses and whether GM would promise to build new vehicles at UAW-represented factories. GM wants the union to take over responsibility for retiree health care costs using a company-funded trust. The UAW was asking for job guarantees in exchange for taking on the costs.
I love that every report says that one of the "last sticking points" is healthcare, especially retirees. Wasn't that THE major sticking point the entire time?
As expected, VEBA is the name of the game. Here's the Detroit Free Press's analysis of the situation:
How much money is involved?
Even the details involve billions. GM reports about $64 billion in health care obligations, more than $50 billion of which is believed to be future retiree health costs. The Detroit Three total is about $112 billion in long-term benefit obligations, of which maybe $100 billion relates to UAW retiree health care.
A key point is how much money GM and the others would contribute to the creation of a trust. People familiar with the talks say GM proposed paying no more than 65% of its estimated liability into a fund. Analysts say union leaders want more than 70%. Against a $50-billion liability, even a 5% gap is worth $2.5 billion.
What about the risks of managing all that money?
Other VEBAs, including one at Caterpillar in 2005, have run out of money before they had provided the benefits they were expected to cover.
Michael Shamhart, 49, an electrician at Lordstown Assembly in Ohio, said he believes active workers will have to give up future raises to support a VEBA, that retirees will have to pay a larger share of their health costs, or both.
Like many workers, he also expressed concern that a VEBA, no matter the level of initial funding, could eventually run out of money.
Would the UAW create a single, huge fund, or individual funds for each company?
People close to the talks say the discussion has been framed as if it would be one VEBA that all three U.S. automakers would pay into.
The UAW, perhaps through a board of directors, will need to hire its own staff to make sure the health funds are being properly managed and invested, people familiar with VEBAs and health-care administration said. Those people asked not to be named because they are not intimately involved in the union's decision making and did not want to risk the loss of contracts for speculating about such a structure.
The creation of three VEBAs would cost more, requiring the union to hire more people and add duplicate administrative tasks.
However, establishing two or three VEBAs might eliminate problems managing the benefits available to members, should economic arrangements with the automakers differ.
UAW has been working to secure VEBA funding increases if the cost of healthcare rises more than estimated, clearly something that has been going on for the last decade or so. For their part, GM is looking for a refund of sorts if a national universal healthcare plan is created. No indication of whether that refund would come with increases in other benefits or more hirings. Still, looks like this contract could be impacted in large part by the 2008 election.
As for union rank and file sentiment on the VEBA, maybe this letter in the New York Times this morning will give you some indication about members' feelings on the whole thing. It was written by Paul Schrade, Warren Davis, and Jerry Tucker, former UAW Regional Directors & International Executive Board Members:
Brothers & Sisters ,
We are writing to express our grave concerns over reports that consideration is being given by UAW negotiators in contract talks with GM, Ford, & Chrysler to a union-managed Voluntary Employee Beneficiary Association, or VEBA health care trust fund to cover hundreds of thousands of retired autoworkers.
Such a proposal, if ratified as part of a new collective agreement, would represent a radical shift in the traditions of our union. Knowingly placing members at risk under such a plan, whether active or retired, is contrary to the mandate of the UAW Constitution and its "Objects." It would undo decades of hard won healthcare benefit protections, paid for in large part by wage diversions, past concessions, and increased worker productivity...
It is also disturbing that a major change of this significance and impact has not been the subject of extensive discussion and debate within the union. The corporate proposed VEBA, which the union negotiators are said to be reviewing, is only now being revealed to the rank and file membership and much of the local union leadership by media reports, and sketchy ones at that. Yet the potential consequences of adopting such a plan will be economically painful, if not disastrous, to those covered by it. A number of factors could adversely affect its viability. Secrecy and uninformed members on this question can only further damage the shared principles we were founded to defend and advance as a union.
Previously negotiated health care protections, along with 30-and-Out Pensions, Supplemental Unemployment Benefits (SUB), Tuition Refunds, and many other benefits where the result of an extensive open internal debate within the union. In several instances, the debate went on for several years before UAW bargainers were authorized to negotiate them into the agreement between the parties.
The three signers of this letter represent six decades of critical experience and involvement within the UAW. We have been an active part of its ascendancy and, in recent years, sad witnesses to its decline. We do not minimize the assault UAW members and all U.S. workers have been under or the challenges our union has faced. But we do respectfully submit that the appropriate counter-proposal to the corporate bailout by way of a VEBA is a UAW demand that 2005's Attachment E "Health Care Reform Letter" be implemented and the corporations become a moving force on the public policy front for the enactment of the current universal, comprehensive, single-payer healthcare legislation contained in H...R. 676, introduced by Michigan Congressman John Conyers.
That such a national health care system would serve the auto companies self-interest and level the competitive playing field is well documented. The companies extol the economic value of the Canadian system. Our role as a union, in behalf of our members and the community at large, is not to help them escape their responsibility to their past commitments but to help them convert those commitments to the common good. On that proposal, our members are informed, and they will stand behind you.
Fraternally,
Former UAW Regional Directors:
Paul Schrade - Region 6
Warren Davis - Region 2
Jerry Tucker - Region 5
Again, it all comes down to politics. And like I said in my previous post, why any corporation that offers healthcare to its employees, especially companies that deal heavily with unions like the Big Three, is not fighting tooth and nail for national universal coverage, is beyond me. I guess it's just down to its basic anti-worker instinct, whether its in its self interest or not.
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