Andrew Pollack's Blog

Technology, Family, Entertainment, Politics, and Random Noise

If your union runs your benefits, who do you strike against?

By Andrew Pollack on 09/28/2007 at 10:08 AM EDT

Health Care costs in the U.S. are driving the costs and decisions of nearly everything else now. Companies like GM which have obligations negotiated over past decades in this area are finding these costs strangling as they have to compete with newer manufacturers that build plants in non-union states or have contracts negotiated more recently that manage health care differently. GM cites a $10 per hour per employee cost difference as a result.

Enter the most recent negotiations with the UAW. GM has managed to off load responsibility for these costs to the Union. According to The Washington Post,

"At the core of the new deal is the transfer of retiree health-care payments from GM to the UAW. GM will pay an estimated $35 billion into a trust designed to appreciate in value and pay health-care benefits for retired workers for at least the next 80 years, the union estimated. In return, GM is able to unload a $51 billion burden in retiree health-care obligations from its books, enabling the troubled company to borrow money more easily and move more nimbly against competitors"

Here's a way to read that. GM pays the UAW a metric buttload of cash to make this problem go away. They turn a huge and growing liability into a fixed one. They're betting the health care problems in this country will not be fixed in a way that would lower their cost of providing them any time soon. The UAW, on the other hand, is betting that they can invest that cash more wisely than GM and cover these costs while at the same pushing ever harder for health care reform in Congress.

Interesting points:

1. GM doesn't believe that health care reform is a safe bet right now, and that costs to provide coverage will at least continue and likely grow.

2. The UAW thinks either than it can better invest than can GM (though GM has its own lending division) or else that not only is health care reform coming in the near term, but that the reforms will come in a way that will let them take advantage of it and migrate their coverage.

What's fascinating about that last bit, is that if GM tried to change the health care provided to whatever plan congress comes up with, the UAW would likely fight it tooth and nail until it was very well proven. Instead, the UAW which tends to support public provided health care and other social programs, will now be in the position to decide on behalf of its membership when its time to switch.

That makes the Union into the Management in terms of benefits, with its own bank accounts directly tied to what it can save on providing health care coverage. Fascinating. If you work for GM, and the UAW decided to switch to an HMO you don't like, who do you strike against?

There are  - loading -  comments....

re: If your union runs your benefits, who do you strike against?By Steve on 09/28/2007 at 11:01 AM EDT
Note: that the union is only taking on Retiree Healthcare not the entire Union
workforce. So I assume the people affected are not even voting union members.

Other Recent Stories...

  1. 07/13/2018Who is HCL and why is it a good thing that they are now the ones behind Notes and Domino?We need to address some biases here. IBM has made a deal under which the Notes & Domino software and intellectual property is now being developed and maintained by HCL America. HCL America is part of the very large "HCL Technologies" company that has grown from its roots in India to become an 8 Billion Dollar company with a global presence in the IT Industry. You could be excused for initially believing, as many people do when they hear this, that "they've outsourced the code to India where they'll milk it ...... 
  2. 03/21/2018Domino Apps on IOS is a Game Changer. Quit holding back.BOOM. This will be as important for the platform as Traveler. If your company has ditched Notes and Domino, I feel sorry for you. For companies that do use Notes/Domino this is a game changer and Apple should be paying attention. Here's why: There are hundreds of little Notes client applications you'd never spend the time and money to build and deploy for your internal user base on IOS that we use Notes for all the time (those of us still using it). Now, those are suddenly ALL available on the iPad. ...... 
  3. 02/15/2018Andrew’s Proposed Gun LawsThese are my current thoughts on gun laws that would radically change the culture and safety of gun ownership in the United States without removing the rights of gun owners or compromising their privacy rights. * Please feel free to link to, or just copy, these ideas. It would be wonderful to see them spread widely and eventually become the basis for something to rally around and become legislation. Update: 3/3/2018 I added #7, increasing the age to purchase. Update: 4/27/2018 Please be aware that I am not ...... 
  4. 05/05/2016Is the growing social-sourced economy the modern back door into socialism? 
  5. 04/20/2016Want to be whitelisted? Here are some sensible rules for web site advertising 
  6. 12/30/2015Fantastic new series on Syfy called “The Expanse” – for people who love traditional science fiction 
  7. 10/20/2015My suggestion is to stay away from PayAnywhere(dot)com  
  8. 08/07/2015Here is one for you VMWARE gurus - particularly if you run ESXi without fancy drive arrays 
  9. 08/06/2015The Killer of Orphans (Orphan Documents) 
  10. 06/02/2015Homeopathic Marketing: Traveler on my Android is now calling itself VERSE. Allow me to translate that for the IBM Notes community... 
Click here for more articles.....

pen icon Comment Entry
Your Name
*Your Email
* Your email address is required, but not displayed.
Your thoughts....
Remember Me  

Please wait while your document is saved.