CHERYL BAKIN
New Member
Been doing some reading and much listening since I posted yesterday.
First, a little history. The UAW negotiated its first contract as a recognized labor union with GM in 1937......71 years ago.
The first initial contracts all dealt with worker safety, wages, and the beginnings of some type of benefits package. Over the last 70 years, the primary focus of the UAW has been to keep its membership protected and the membership base preserved and expanded.
(In the State of Michigan, alone, UAW represents office workers, workers in the state capital and other industries, just to name a few).
As it brought in the union to other types of work, the UAW has tried & fought to obtain "UAW auto industry" benefits and wages on workers from very dissimilar types of jobs.
Also, following the trends of the labor agreements, whatever the Union obtained, the salaried auto people generally got, in terms of wages & benefits. Similar types of health care and retirement plans were also encouraged at all associated supplier and dealership operations.
When labor negotiations began with GM prior to the expiration of their 2007 contract, GM and the Union realized that they had more people RETIRED THAN THEY DID WORKING. Benefits were promised to all.
They had to find a way to cover that nut.
GM & the UAW accepted the creation of the Voluntary Employee Benefit Trust Fund. Therein, the auto industry would contribute so much year per worker into the Fund, beginning 1-1-2010...primarily for health care. I believe that the UAW intended for all three automakers to contribute to the fund -- I cannot locate any information on whether or not Ford and Chrysler also joined in this trust agreement..
The "tought nut" is the dollars necessary to fund the trust. The UAW would manage the fund, but that the auto industry would have to fund, by 1-1-2010, all the EXISTING LEGACY COSTS, estimated to be 65 billion at the time with cold, hard cash. (GM's share is estimated to be 51 billion).
So, GM has had since 9-17-2007 to figure out how to fund 51 billion in legacy costs with real time, hard cash dollars ------ or alternatively, go back to the table and negotiate with the UAW to pay this cost out to the UAW in smaller installments, over a longer term.
GM has chosen to to neither one.
Hwever, , GM has come to the USA taxpayers, with hat in hand, and said how about a little support and a gift????
For this, I have little to no sympathy.
Now, the legacy costs are high -- they are based upon current benefit levels and age expectancies because the benefit levels promised are great & generous. We all know people live a lot longer today than 70 years ago (about 20+ years).
I have read many, many times that the benefit costs paid by the auto industry add $1,000 to the price of EVERY CAR/TRUCK that is built!
Further, should GM be forced into bankruptcy, the pensions are protected by the Pension Benefits Guarantee Corporation. The plans, with all data & payout information will be taken over by the PBGC.
All legitimate retirement plans are required, by federal law, to pay a premium to the PBGC each year for each worker. The PBGC is like an insurance fund, if you will. If the company fails, the PBGC takes over the plan, and all its assets, and begins to make the payouts to the retirees. Unfunded liabilities of the insured and guaranteed plans would be paid from the sale of any assets. (The PBGC becomes just like the IRS, and is guaranteed to be paid.)
However, the MAXIMUM pension payable thru the PBGC today is $54,000 per year per person. (This # rises each year). So anyone who is receiving a pension larger than this see a payment reduction. Anyone who receives a "supplemental" benefit would take a reduction.
HEALTH CARE is the HUGE, UNFUNDED LIABILITY HERE. that is causing the comotion. Health care has always been paid for from present earnings by all companies.
So the burden to pay for retiree as well as active employee health care always has been paid with present day dollars. There was never an insurance "savings account" set up to cover this.
Supplemental retirement benefits, not part of any specific retirement benefit, are funded in the same way as health care costs.
(These types of benefits are offered at the "whim" of the company and can be taken away at any given time. (Supplemental retirement benefit means that the company is offering you $xx.xx per month until you reach age 65 to retire now, at age 55, 60 or 62 or instance.
The additional benefit is paid to to until you reach 65 and are elegible for Soc. Sec.). )
The Billions of dollars that GM wants will go directly to pay these health care costs -- funding the UAW trust fund, and nothing more.
We will not see any concrete reductions in work force, more operating efficiencies, lower costs to produce products. etc.
We, in small business, strive every day to stretch our hard earned dollars, and make do with less. We negitiate with our suppliers, our landlords, our employees, and reduce costs in every way we can.
While I do feel sorry that people are living with so much uncertainity, and so much possible heartache, I question whether we should have to pay for the fact that someone else cannot pay their bill.
What you are seeing is the first real and very concrete push for a national health care plan that we have seen since Bill Clinton.
I agree with a lot of what Fox said above (the haves vs the have notsand the political fights that will insue).
The UAW members & retirees could be the first to enter a national health care plan.....not by their choice.
I guess we should just take the $$ from our left pocket & put it in our right pocket, and send them all their new insurance cards.
Just my humble opinions,
Cheryl
I think it is time that the auto industry wake up, and do the same thing.
As former governor Romney said today on the Today show, i't time to let them go into bankruptcy, so that we can rebuild again......and his prediction is that Chrysler probably will not survive.
First, a little history. The UAW negotiated its first contract as a recognized labor union with GM in 1937......71 years ago.
The first initial contracts all dealt with worker safety, wages, and the beginnings of some type of benefits package. Over the last 70 years, the primary focus of the UAW has been to keep its membership protected and the membership base preserved and expanded.
(In the State of Michigan, alone, UAW represents office workers, workers in the state capital and other industries, just to name a few).
As it brought in the union to other types of work, the UAW has tried & fought to obtain "UAW auto industry" benefits and wages on workers from very dissimilar types of jobs.
Also, following the trends of the labor agreements, whatever the Union obtained, the salaried auto people generally got, in terms of wages & benefits. Similar types of health care and retirement plans were also encouraged at all associated supplier and dealership operations.
When labor negotiations began with GM prior to the expiration of their 2007 contract, GM and the Union realized that they had more people RETIRED THAN THEY DID WORKING. Benefits were promised to all.
They had to find a way to cover that nut.
GM & the UAW accepted the creation of the Voluntary Employee Benefit Trust Fund. Therein, the auto industry would contribute so much year per worker into the Fund, beginning 1-1-2010...primarily for health care. I believe that the UAW intended for all three automakers to contribute to the fund -- I cannot locate any information on whether or not Ford and Chrysler also joined in this trust agreement..
The "tought nut" is the dollars necessary to fund the trust. The UAW would manage the fund, but that the auto industry would have to fund, by 1-1-2010, all the EXISTING LEGACY COSTS, estimated to be 65 billion at the time with cold, hard cash. (GM's share is estimated to be 51 billion).
So, GM has had since 9-17-2007 to figure out how to fund 51 billion in legacy costs with real time, hard cash dollars ------ or alternatively, go back to the table and negotiate with the UAW to pay this cost out to the UAW in smaller installments, over a longer term.
GM has chosen to to neither one.
Hwever, , GM has come to the USA taxpayers, with hat in hand, and said how about a little support and a gift????
For this, I have little to no sympathy.
Now, the legacy costs are high -- they are based upon current benefit levels and age expectancies because the benefit levels promised are great & generous. We all know people live a lot longer today than 70 years ago (about 20+ years).
I have read many, many times that the benefit costs paid by the auto industry add $1,000 to the price of EVERY CAR/TRUCK that is built!
Further, should GM be forced into bankruptcy, the pensions are protected by the Pension Benefits Guarantee Corporation. The plans, with all data & payout information will be taken over by the PBGC.
All legitimate retirement plans are required, by federal law, to pay a premium to the PBGC each year for each worker. The PBGC is like an insurance fund, if you will. If the company fails, the PBGC takes over the plan, and all its assets, and begins to make the payouts to the retirees. Unfunded liabilities of the insured and guaranteed plans would be paid from the sale of any assets. (The PBGC becomes just like the IRS, and is guaranteed to be paid.)
However, the MAXIMUM pension payable thru the PBGC today is $54,000 per year per person. (This # rises each year). So anyone who is receiving a pension larger than this see a payment reduction. Anyone who receives a "supplemental" benefit would take a reduction.
HEALTH CARE is the HUGE, UNFUNDED LIABILITY HERE. that is causing the comotion. Health care has always been paid for from present earnings by all companies.
So the burden to pay for retiree as well as active employee health care always has been paid with present day dollars. There was never an insurance "savings account" set up to cover this.
Supplemental retirement benefits, not part of any specific retirement benefit, are funded in the same way as health care costs.
(These types of benefits are offered at the "whim" of the company and can be taken away at any given time. (Supplemental retirement benefit means that the company is offering you $xx.xx per month until you reach age 65 to retire now, at age 55, 60 or 62 or instance.
The additional benefit is paid to to until you reach 65 and are elegible for Soc. Sec.). )
The Billions of dollars that GM wants will go directly to pay these health care costs -- funding the UAW trust fund, and nothing more.
We will not see any concrete reductions in work force, more operating efficiencies, lower costs to produce products. etc.
We, in small business, strive every day to stretch our hard earned dollars, and make do with less. We negitiate with our suppliers, our landlords, our employees, and reduce costs in every way we can.
While I do feel sorry that people are living with so much uncertainity, and so much possible heartache, I question whether we should have to pay for the fact that someone else cannot pay their bill.
What you are seeing is the first real and very concrete push for a national health care plan that we have seen since Bill Clinton.
I agree with a lot of what Fox said above (the haves vs the have notsand the political fights that will insue).
The UAW members & retirees could be the first to enter a national health care plan.....not by their choice.
I guess we should just take the $$ from our left pocket & put it in our right pocket, and send them all their new insurance cards.
Just my humble opinions,
Cheryl
I think it is time that the auto industry wake up, and do the same thing.
As former governor Romney said today on the Today show, i't time to let them go into bankruptcy, so that we can rebuild again......and his prediction is that Chrysler probably will not survive.
