Jan 20, 2014
Fiat’s Sergio Marchionne and the UAW-VEBA Trust made a surprise announcement on New Year’s Day. The VEBA, which provides health care for about 60,000 Chrysler hourly retirees, would sell its entire stock in Chrysler to Fiat for the bargain price of $4.3 billion.
Somehow, Fiat’s 2009 agreement to pay $6 billion to the VEBA disappeared.
No happy new year for the retirees. The VEBA, $3 billion underfunded, already picks their pockets every month, and this deal means the pickpockets will be back for more, sooner.
In the 2007 contract with Chrysler, the UAW first agreed to become the administrator for retiree health-care benefits. But Chrysler provided less than half of the money needed to keep paying the promised benefits! Retirees were falsely told that this would mean no changes for them, and the new fund would be “good for 80 years.”
It wasn’t good for 80 months. On Jan. 1, 2010, the new VEBA took over and immediately shifted costs onto retirees. Chrysler had paid all premiums – now retirees had to pay monthly premiums. Chrysler had covered all medical costs – now retirees had to pay co-pays on services. Chrysler had provided dental and vision coverage – now retirees were on their own.
And since then, every year on January 1, the premiums and the co-pays and charges go up.
The government guaranteed Chrysler’s survival and helped it thrive. But the workers whose years of labor built up Chrysler are left with shrinking resources and broken promises.