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UAW
Retirees: Their Future is Our Future
UAW New Directions Movement, October
21, 2005
Collaboration between the
UAW and GM, over 20 years in the making, is well known and now accepted as SOP.
Although rarely discussed openly, its footprints are everywhere. A prime example is the current "tentative agreement"
which would force retirees to pay
a bigger percentage of
their health care and active
workers to pick up the tab.
At the same time, fearful of backlash from members, the union has
filed a lawsuit preventing UAW retirees from taking legal action against GM.
The
current round of collaboration began in April 2005 after UAW President Ron Gettelfinger told GM, "Don’t Push Me." He assured anxious
and angry workers that he would not open the contract to alter health care
benefits and that GM could not unilaterally alter retirement benefits. He
promised to work within the confines of the contract. He then attended secret
meetings with Delphi, other major suppliers, and the Big Three. After consulting with Wall Street
analysts [1] Gettelfinger
did in fact open the contract thus allowing GM to change health care benefits
for existing retirees. What GM could not legally do themselves, Gettelfinger did for them.
What
is shocking about the lawsuit is that it makes the collaboration so
transparent. By getting a couple proxies to file a class action lawsuit
against GM (and providing lawyers), the union could both ‘manage’
the scope of the suit and be declared the sole representatives of UAW-GM
retirees. This means retirees will not be able to file a class action suit of
their own, nor have an independent say in any proposed remedy. This set-up
leaves the door open for further cuts in retiree benefits.
The
Detroit Free Press reported, "A statement from GM said the car company
‘supports this action.’ GM and the UAW agreed, as part of the
overall tentative settlement announced on Oct.
17, 2005, that the UAW would seek court approval. GM also agreed to work with
the UAW to expedite such reviews and approval. Today's action constitutes the
initial step in implementing this element of the agreement.’" [Detroit Free Press, Retirees
Worry as UAW Seeks Court OK, 10/19/05]
No
wonder GM "supports this action." With the ‘cooperation’ of
the UAW GM is protected from UAW retirees after successfully altering
their health care benefits. This
type of cooperation has a name, company unionism. It is the policy of the
Administrative Caucus.
UAW
retirees should attend court proceedings in full force and demand first, that
their opinions be included in the suit, and second, that any court approval
of post retirement concessions be contingent on retirees’ right to
vote.
Single-Payer National Health Care
What
happened to the union’s demand for GM to support a Single-Payer
National Health Care System? Why wasn't action on health care reform a
precondition to discussions on health care? Both the company and the union
understand the importance of a universal health care system. Both could have lobbied Congress,
built support in the working class, and showed that unions aren’t just
for current members. All Big Three contracts with the CAW state, "
Publicly funded health care . . .has been a significant factor in maintaining
and attracting new auto investment to Canada." Furthermore they pledge to lobby
federal and provincial governments for it.
What
accounts for the difference? Many
of us would link it to the UAW’s
collaboration/jointness model of unionism, something
the CAW has resisted for many years.
So where does that leave UAW retirees and active workers?
If the UAW accepts the
premise that workers should bear the burden of a wasteful, inefficient
health care system, what hope do less fortunate, nonunion workers have? Gettelfinger
says “Single Payer National Healthcare has long been a goal of the
UAW.” But, these are water over the damned words, meant to soothe and
pacify the sleeping giant into silence.
If rank and file passivity were not the goal, the UAW would promote
national healthcare as the best solution for all working people not with
words, but with actions. Instead of forcing the Big Three to demand Universal
Health Care as the logical solution to their cost differential with foreign
automakers, the International is honing the corporate ax against workers.
Did
Wagoner and Gettelfinger attend the same sugar
coated seminar, or did they simply get their stories straight? Wagoner told
the Associated Press, "Health care costs in this country are out of
control. We would really like to see much more focus and leadership from
elected officials especially in Washington." His words belie
his actions.
UAW
members should not let GM and the other auto companies make them pay for
mismanagement and the inexcusable failure to conduct business in a socially
responsible way. For UAW members,
active and retired, this latest product of the collaboration/jointness model of unionism puts us on another
‘slippery slope’ of unwarranted givebacks. Does anyone believe it’s
the last time, and that they won’t be back for more? On behalf of themselves and all
American workers, UAW members should reject this assault on the hard-fought
gains of retirees.
UAW
members should proceed without concern for corporate America (GM), but should
proceed with deep concern and utmost diligence for the well-being of America’s working class. We
urge UAW members to vote against these concessions first and foremost to
protect retirees, who not only sacrificed for our well-being, but who do not
have the right to vote on contracts. If we open the door to concessions on
retiree health care, then we set a precedent for more concessions in the
future. The UAW lawsuit against GM doesn’t prevent cuts in health care
for retirees, it endorses the UAW’s
collaboration with corporations in executing changes the company wants. Active members jeopardize their own
security by endorsing such a policy
Unanswered Questions
There are some fundamental
questions that the International should answer about how this plan affects
members.
It is important to see the whole agreement and
have time to digest it. The Highlights, as past experience has shown are not sufficient.
A major change that has already been announced
is that the defined benefit will be converted to a "defined contribution
VEBA". What is the difference between defined benefit and defined
contribution and how will it affect members?
Who will control the VEBA? In the past GM has
taken money out of the VEBA for capital investments. What happened to the
original VEBA?
GM is committed to pay one billion into the VEBA
in 2005, 2006, and 2011. What happens in the gap between 2007 and 2011? A new
Agreement with new concessions? More COLA diversions? Is this a set up
for 2007? If benefit claims exceed contributions
what happens? Will costs be passed onto retirees? The maximum annual increase
for out of pocket expenses would be 3% per year for retirees. Does that mean
18% by the expiration in 2011?
Will there be limits to the plan? For example,
will the plan discriminate against the mentally or chronically ill or people
with rare diseases by limiting or denying coverage? Will there be a cap on
total payouts? Who will
administer this plan? Is this another jointness
plan to provide job security for International appointees at the expense of
workers?
Why is COLA so Important?
The
major reason autoworkers in the Big Three make above average wages is cost of
living. There were many years when we
did not receive raises despite productivity gains. But thanks to
retirees who struck GM in 1970 for ten weeks, our wages rose with inflation.
When inflation went through the roof during the Reagan years, our wages rose
with the rate of inflation. While non union workers lost spending power due
to inflation our standard of living was maintained. COLA is one of the most
important factors in our contract. COLA ensures that we will be able to pay
our bills when gas and heating prices rise.
As
former New Directions leader and UAW Local 599 President, Dave Yettaw said,
"The corporations are playing chess, but the UAW is playing
checkers." Which is to say the companies not only have a long term plan
to shift the burden of health care costs onto workers, they want to eliminate
COLA in the bargain. COLA Diversion to pay for health care and other benefits
is an alarming trend.
COLA Diversion is a code phrase for money diverted from wages to
offset the cost of Health Care. Below is a short history of COLA diversion.
COLA
Diversions for Health Care:
1964....
2 cents per hour
1967....
2
1976....
6
1982...16
1984...13
1987...00
1990...14
1993...22
1996... 2
1999...00[2]
In
simple English COLA Diversion amounts to a health care premium. Not adjusting
for inflation, or accounting for overtime, or calculating Travel COLA
concessions, the accumulated COLA diversion amounts to a minimum of $1,500
per year.
On
top of that, in the 2003 Agreement 2 cents per quarter from COLA (8 cents a
year) was diverted to pay for pensions.
These diversions add up over time and represent a permanent loss. We
not only accepted a reduction in pension improvement, we paid for it. On top
of that in the 2003 Agreement the rate of health care inflation was deducted
from the COLA formula. With all these deductions we are rapidly
approaching a zero cost of living
adjustment. Now GM wants another dollar an hour. Where will it end?
Does anybody but GM make out Here?
"This
is opening the door to a whole new era of collaboration between labor and
management," said David Cole, auto analyst. Is Cole aware of a new layer of jointness/collaboration – another class of UAW
self-serving bureaucrats – lining up jobs, managing a VEBA, and
administering a health care plan for UAW members? There is every reason to
think this might be the case.
Remember how joint funds grew from a nickel to nineteen cents per
hour, plus up to five dollars for overtime? How is it that during all this
talk of concessions we never heard of any concessions in joint funds? How is
it GM can afford joint fund donations of nineteen cents per hour but not
health care?
Things
weren’t always this way in the UAW. Before collaboration members and
officers aligned themselves for the well-being of a nation, and were willing
to fight for the greater good of all working people. Today’s retirees
were those workers who fought for
justice. They deserve our support.
They won pension, health care, and cost of living for us. If we
abandon retirees now, we cast our fate with the jackals.
UAW
GM Tentative Agreement
UAW Federal Court Documents 1
& 2
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