Health care benefits is the issue they can’t resolve
Monday, Sept. 24 – When their deadline passed with no agreement from GM on a new contract, thousands of United Auto Workers (UAW) walked off the job this morning, and workers began picketing outside the plants. The first nationwide strike during auto contract negotiations since 1976 is mainly caused by disagreement over what to do about health care benefits.
The company has proposed establishing a union-managed trust to administer GM’s retiree health care benefits. Such a trust would relieve the company of a great burden, but put retiree’s health care at great risk, say critics of the plan. They point to a similar plan at Caterpillar, which bankrupted, leaving retirees with no health care benefits.
The proposed health-care trust – known as a voluntary employee benefit association, or VEBA – would transfer $51 billion in unfunded retiree health care costs off GM’s books and saddle the union with finding a way to keep the trust funded. GM has nearly 339,000 retirees and surviving spouses.
A spokesman for the National Automobile Dealers Association reports that GM has sufficient stock of all products to withstand a short strike, but even a brief nationwide strike could prove costly for the automaker.
The last UAW walkout at GM, in 1998, was limited to only two parts plants and lasted only 54 days, yet cost the company a reported $2.2 billion.
The UAW has 73,000 members at 82 GM facilities across the United States.
