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. 01/26/2023Better Running VirtualBox or VMWARE Virtual Machines on Windows 10+ Forgive me, Reader, for I have sinned. I has been nearly 3 years since my last blog entry. The truth is, I haven't had much to say that was worthy of more than a basic social media post -- until today. For my current work, I was assigned a new laptop. It's a real powerhouse machine with 14 processor cores and 64 gigs of ram. It should be perfect for running my development environment in a virtual machine, but it wasn't. VirtualBox was barely starting, and no matter how many features I turned off, it could ...... 
  2. 04/04/2020How many Ventilators for the price of those tanks the Pentagon didn't even want?This goes WAY beyond Trump or Obama. This is decades of poor planning and poor use of funds. Certainly it should have been addressed in the Trump, Obama, Bush, Clinton, Bush, and Reagan administrations -- all of which were well aware of the implications of a pandemic. I want a military prepared to help us, not just hurt other people. As an American I expect that with the ridiculous funding of our military might, we are prepared for damn near everything. Not just killing people and breaking things, but ...... 
  3. 01/28/2020Copyright Troll WarningThere's a copyright troll firm that has automated reverse-image searches and goes around looking for any posted images that they can make a quick copyright claim on. This is not quite a scam because it's technically legal, but it's run very much like a scam. This company works with a few "clients" that have vast repositories of copyrighted images. The trolls do a reverse web search on those images looking for hits. When they find one on a site that looks like someone they can scare, they work it like ...... 
  4. 03/26/2019Undestanding how OAUTH scopes will bring the concept of APPS to your Domino server 
  5. 02/05/2019Toro Yard Equipment - Not really a premium brand as far as I am concerned 
  6. 10/08/2018Will you be at the NYC Launch Event for HCL Domino v10 -- Find me! 
  7. 09/04/2018With two big projects on hold, I suddenly find myself very available for new short and long term projects.  
  8. 07/13/2018Who is HCL and why is it a good thing that they are now the ones behind Notes and Domino? 
  9. 03/21/2018Domino Apps on IOS is a Game Changer. Quit holding back. 
  10. 02/15/2018Andrew’s Proposed Gun Laws 
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.