Word: uaw
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...health care of thousands of retired autoworkers is about to change: on May 29 the membership of the United Auto Workers overwhelmingly approved a restructuring plan with GM, according to UAW president Ron Gettelfinger. The plan gives the union's health-care vehicle some promissory notes, plus a 17.5% stake in GM and warrants to purchase another 2.5%. (See TIME's photo-essay "General Motors Factory-scapes...
...Gettelfinger insists that the union has already made substantial cuts to health-care costs. In less than four years, blue collar retirees have gone from modest co-pay fees and deductibles to footing 25% of the bill for their health care. The new UAW contracts also include reductions in benefits: dental and vision coverage will be dropped, effective July 1. "The UAW has always been willing to sacrifice to help these companies," Gettelfinger says. "When this started, we were on third base before the other stakeholders were even in the ballpark...
...UAW, meanwhile, has been asked to take a deal similar to the one struck with Chrysler. Autoworkers would give up some holidays and bonuses. Their wages would not automatically rise in the future as they had in the past. Some 20,000 jobs would be cut, and future hires would earn wages comparable to those paid in Toyota's U.S. factories. When those givebacks are added to an earlier surrender of the notorious "jobs bank" - which paid laid-off autoworkers for doing nothing - clearly the UAW's once heavenly bed has lost much of its fluff. What remains...
...first in line for any proceeds if the company is liquidated. In between lie the unsecured claims. For a carmaker, this creditor class includes suppliers who haven't been paid, car owners whose repairs ought to be covered by warranty, dealers seeking reimbursement for manufacturers' rebates - and the UAW seeking a VEBA payment...
...Some lenders have been galled to see the Democratic Administration, whose party receives millions from the UAW each election cycle, giving a sweeter deal to the union than was offered them. Task-force members counter that other unsecured claims have received even better deals than the union's. Warranties, for example, have been 100% guaranteed - no haircut at all. "We're trying to avoid liquidation, and so these claims have to be classified according to their importance to the future viability of the company," a task-force official explained. "Obviously you can't sell cars without warranties...