Caterpillar's retired United Auto Workers (UAW) members are suing the company for cuts in health coverage their union approved. In return, Caterpillar is suing the UAW to make them pay– should their members win their lawsuit. As quoted in Forbes, Caterpillar spokesman Rusty Dunn asks, "How can the union sponsor lawsuits that fight the very terms that the union proposed, negotiated and ratified during collective bargaining?" Caterpillar also alleges the UAW encouraged their retirees to file the suits. The UAW has declined to comment on Caterpillar's actions. You can bet the automakers will be keeping an eye on how this progresses as they attempt to make similar changes in the health care coverage they provide for their thousands of retirees.
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Just goes to show that the car companies “must” work “in good faith” but the UAW need not do so.
Bye bye Detroit 3 and hundreds of thousands of jobs. This just proves, the gig is up.
Good faith Glenn 126? A guy works there for 30+ years and is promised a pension and benifits and Caterpillar backs down from what was promised folks 25 or 30 years ago.Thats good faith eh?
Caterpillar has been gloating for a long time,on how they broke the Union.I’m rooting for the retirees regardless of who pays.
Some promises aren’t worth the toilet paper that they’re smeared on… I do feel for those retirees, and am so glad that I have a 401(k) plan — well, forgetting last week, anyway.
As much as I hate unions (check my previous posts), I have to wholeheartedly agree with mikey on this one. The guys who retired, put their time in under a contract that “guaranteed” income after they retired. So they should get it. It may be silly to include that in current contracts for current/new workers, but the ones that already retired should be payed under the contract they worked under.
I also agree with shaker, I don’t have a pension, and if I was offered one in lieu of a higher salary i wouldn’t take it. I don’t trust anyone to manage my money but me. But the only reason I don’t trust anyone is because of things like CAT (and many others) is doing, and the guys who have already retired after their 30 years didn’t know that they shouldn’t trust the company. Of course I won’t feel bad when the current guys retire, as they see what’s going on and they better be saving for themselves now.
They aren’t balking on the pension, it’s the health care. While it does bode poorly for CAT, if the UAW agreed to negotiated changes in the health care plans for their retirees, then the retirees should be talking to the UAW for this change.
I think it is in poor taste that the UAW would be telling their retirees to sue CAT for the changes when they agreed to it. The retirees paid the UAW to represent them.
The retirees are barking at the wrong tree, if anything sue the union for failure to represent them properly.
It sure looks like a union lawyer trial balloon.
Tactical error though, they should have waited until after the 2.? work their deals. Unless of course everyone wants the thing to blow up without coming out and saying so.
CAT is guilty of failing SunTzu 101, never let an adversary live to fight another day.
Interesting situation, both the employer and the union shortchange folks that worked and contributed for many years.
All contracts made with labor unions are signed under duress since 1935 thanks to the 1935 Wagner Act.
Are the retirees really still part of the union? Do they still vote? If not, they should be suing both of them, and the feds should be looking into charges against both as well. Sounds like a conspiracy by Cat and UAW against the retirees.
All in all, another good example of why standing unions and the laws pertaining to them are bad, just plain bad.
Landcrusher:
Are the retirees really still part of the union? Do they still vote? If not, they should be suing both of them, and the feds should be looking into charges against both as well. Sounds like a conspiracy by Cat and UAW against the retirees
Retirees do not vote. Whether retirees are union ‘members’ is a matter of debate (I think the law is ERISA). The fact that it’s unclear (and has brutally uncertain accounting implications) is a reason pensions (and unions) are becoming more and more useless.
‘Conspiracy’ is a tough sell when the terms are out in the open. The question is “Can contract ‘X’ between 2 parties change the terms of previously agreed contract ‘Y’. I don’t see why not.
I know firms without a contract are under no obligation to continue previously provided retiree health coverage. Given demographic and medical cost trends, the trend now is to fix their costs and hammer the retirees with all increases.