UAW Negotiations With GM To Resume Monday, VEBA Funding Still Undecided
Ford Motor and GM in August formally asked UAW to assume responsibility for the health care benefits of more than 1.5 million working and retired employees. Under the arrangement, the companies would transfer retiree health care obligations to an independent trust fund that the union would manage. Such an agreement would free the automakers from future retiree health obligations. UAW told local union leaders on Thursday that it had chosen GM as the lead negotiation partner for this round of contract discussions, leading observers to believe the union supports the creation of a VEBA to assume retiree health care liabilities from the Big Three. GM has been the strongest proponent among the automakers of creating a VEBA (Kaiser Daily Health Policy Report, 9/14).
UAW leaders told autoworkers to continue their jobs as usual on Monday. The GM contract, which expired on Friday, is being extended on an hourly basis while negotiations continue. Contracts with Ford and Chrysler Group have been extended indefinitely while negotiations between UAW and GM are under way (Merx et al., Detroit Free Press, 9/17). According to the Wall Street Journal, if the VEBA deal is approved, "it would almost assuredly open the door to benefit reductions because the trust would probably not be designed to fully absorb double-digit medical cost inflation" (Stoll/McCracken, Wall Street Journal, 9/17). VEBA Issues Under Discussion
Sources say GM and UAW generally agree that a VEBA "makes sense," but they are "divided on safeguards for both sides," according to the News. UAW is seeking a pledge by GM to provide additional funding for the VEBA if retiree health care costs rise faster than anticipated. GM is seeking a promise that it can reduce contributions to the VEBA if national health care legislation that affects UAW retirees is passed. Another issue at the forefront is how much GM will contribute to the fund. Sources close to the negotiations have said GM wants to fund it at no less than 65% of its retiree health care liabilities, but UAW is asking for more (Detroit News, 9/17).
People familiar with the talks said negotiators also are debating what type of assets GM would contribute to the VEBA. A local UAW leader said he was told that another remaining issue is whether GM will agree to specific U.S. manufacturing commitments in exchange for the VEBA (Detroit Free Press, 9/17). Sources said UAW and GM on Sunday discussed giving workers cash bonuses to sign off on the agreement (Detroit News, 9/17). Strike Deadline
As the negotiations continued into Monday, the "strike threat seemed to wane," the AP/Long Island Newsday reports (Krisher/Durbin, AP/Long Island Newsday, 9/17). Harley Shaiken, a labor expert from the University of California-Berkeley, said that UAW may be close to setting a strike deadline. "Ultimately, it is that deadline -- with a realistic chance that it could happen -- that will move negotiations along. Because both sides know all of the facts, are aware of all of the issues, know the trade-offs, and if there is a logjam, the strike deadline could very well break that," Shaiken said. He added, "On the other hand, it could result in a work stoppage" (Detroit Free Press, 9/17).
UAW Local 735 President Chuck Rogers on Sunday said UAW almost began a strike on Friday night when UAW President Ron Gettelfinger walked out of the talks after a dispute with GM negotiators. However, GM CFO Fritz Henderson persuaded Gettelfinger to return to the bargaining room. Rogers said progress has been made since that time (AP/Long Island Newsday, 9/17).
Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation© 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.
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