UPDATE: UAW BACK TO WORK …NOW THE QUESTIONS BEGIN

Posted by on 9/26/2007

Update:
Rick Haglund reports:

  • The contract also gives GM a long-sought two-tier wage structure affecting thousands of temporary and non-manufacturing workers. The pact reportedly lets the automaker pay them $18 an hour instead of the $28 an hour earned by existing workers.
  • But it’s not clear where GM will come up with the $38 billion to fund the VEBA.
  • The VEBA also must be approved by the courts and the Securities and Exchange Commission, GM said. That could take up to two years, said one person with direct knowledge of the contract who did not want to be named.
  • Negotiations at Chrysler could be particularly difficult one analyst said, because Chrysler is privately held by Cerberus Capital Management.

    Private equity firms such as Cerberus try to maximize profits at companies they own while investing as little as possible of their own money, said Alan Baum, an analyst at The Planning Edge in Birmingham.

    “The last thing they want to do is lay out billions of dollars for retiree health care,” he said.

    • _______________________________________________________________________________________

    It appears that GM came out ahead in the negotiations, but the employees and retirees should be happy with the outcome.
    DETROIT

    the historic agreement would shift the burden of retiree health care from GM to the union and give workers bonuses and lump-sum payments. The person requested anonymity because the contract talks are private.

    The agreement includes GM’s top priority in the negotiations ” shifting most of its $51 billion unfunded retiree health care obligation to a UAW-run trust. The company would pay about 70 percent of the obligation into the trust, called a Voluntary Employees Beneficiary Association, or VEBA.

    The union would then invest the money and take over health care responsibilities for about 340,000 GM hourly retirees and spouses.

    My first thought on this was that now it is up to the union to make sure that the funds are free and clear of any criminal element. Secondly, will the UAW continue to provide the retirees with the benefits packages that they were promised?

    The UAW still needs to determine who they will negotiate with next, but their position is weakened. I think that they thought that the candidates would rally around them, but alas, it wasn’t to be. I can’t say as I blame them though…how do you rally around a group that says they want job security and shows it by walking off the job?

    National News

    6 Comments.

    1. PCD 9/26/2007 at September 26, 2007 - 06:00 AM

      I can see the crime families giving standing ovations to this pact. How many billion dollars can they plunder? With the Democrats in Congress weakening the oversight of the unions, the mob will have a field day.

      Let’s start a pool on how soon the union pension plan will collapse and the taxpayer have to pick up the tab.

    2. Pam 9/26/2007 at September 26, 2007 - 09:10 AM

      PCD- I thought the exact same thing!;)

    3. Robert 9/26/2007 at September 26, 2007 - 09:24 AM

      I think you are right. GM accomplished what they wanted, and that was to get the monkey off GM’s back. It’ll be on the taxpayers backs soon enough.

    4. San Francisco Liberal 9/27/2007 at September 27, 2007 - 02:16 PM

      You folks are aware, I’m sure, that this is excellent news for investors.

      The stock market rose when this agreement was announced.

      This really worked out well for everyone involved.

      And to think you righties were screaming and moaning about the workers shouldn’t strike.

      Looks like it was a good idea, and maybe an infusion of extra life for unionism in America.

    5. Robert 9/27/2007 at September 27, 2007 - 03:54 PM

      What exactly did the strike accomplish, SFL? Nothing as far as I can see.

    6. Pam 9/27/2007 at September 27, 2007 - 04:14 PM

      4- Well for one that is always lecturing us about how the poor carry this country on their backs, I’m a bit surprised at you SFL.

      My stocks have been doing great for the past few months…I have not had much to complain about, so how do my gains help the people that were layed off at GM suppliers?

      The stock market gets jittery with uncertainty and rallies when issues are resolved…