Jun 8, 2015
On May 14, UAW present and future retirees took another hit to their health benefits fund. A federal appeals court ruled 3-0 that GM could escape a payment of $450 million for the workers’ VEBA. The VEBA account is used to pay for their health care. The court used a technicality from the GM bankruptcy-and-bailout deal, to duck this payment owed to retirees of GM’s former parts unit, Delphi.
A GM spokesman said, “We’re pleased.”
Yes, GM is pleased to stiff the workers once again, pleased to break its promises again. It’s all so easy when they use bankruptcy, plus a federal bailout of 49.5 billion dollars!
On the UAW side, this is just one more setback for one of the union’s bad ideas. From 2006 to 2009, the auto companies deliberately ran up big deficits in their health care funds. Then they pressured the UAW to take over the funds saying otherwise, the companies would go bankrupt.
The UAW agreed to take over. They set up a new VEBA fund with several billion dollars of corporate seed money – roughly half of the companies’ true obligation! They let the companies off the hook.
Why?! Just look at recent U.S. auto profits. Just since 2011, U.S. auto makers have racked up 73 BILLION dollars in combined operating profits. Under the previous contracts, these profits would have paid for health care claims for retirees.
But when the UAW took over the plans, there was no more profit stream. Instead, the fund has to be managed like a savings account. Now UAW retirees have $450 million less in their healthcare account.
And whether the fault lies with the UAW for not continuing to include this specific amount in the recent GM contracts, or with GM or the court system itself, it is an inexcusable “oversight.”
It is one more proof of a failed union policy that counsels the workers to depend on a partnership with the bosses, and to give concessions at every turn. The same policy that calls on workers to depend on the court system for justice when the companies screw them.
It’s plain to see that today’s union leaders are not interested in making a fight to restore benefits like company-paid health care for retirees. But the retirees, and the workers who want to be retirees, should adopt a different policy and should prepare to make a fight to protect these hard won benefits now and into the future.