Well, that's what happens when your employer pays you 80 cents on the dollar for your health care, and says here, you guys sort it out. The Detroit News reports that U.S. District Court Judge Robert Cleland considers Chrysler's $10.3b health care compact with its United Auto Workers (UAW) members "fair and reasonable." Under the terms of the agreement (a.k.a. health care VEBA), 170k active Chrysler workers, retirees, spouses and dependents will face new charges for their doctors' visits. In the short term, Chrysler retirees will now pay an $11 monthly premium and a $159 annual deductible. After that, a new 11-member supervisory board (six court appointees, five union reps) will ensure that the fund makes up the $8b shortfall AND makes enough money to cover soaring health care cost inflation, WITHOUT raising deductibles or further limiting patient choice OR allowing union members to plunder the fund OR letting cronies (lawyers, hospitals, etc.) get sweetheart deals OR waste precious VEBA funds. Meanwhile, Chrysler's lawyer says the VEBA's a good deal because her employer might go out of business. "We do believe in the light of the uncertain environment that Chrysler is operating that this settlement is the best for all parties," Nancy Ross pronounced. Ready for that summer vacation yet Nance?
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The prior plan, with no co-pays and Viagra on the formulary, was unbelievably generous in this day and age.
FWIW, the hackles the VA system got when they raised their prescription copays from $0 to $2 back around 1990 was tremendous.
I can only dream of having insurance coverage as good, right now, when I’m working, as these Chrysler retirees are now going to have. And that is probably true of 90% of the US population.
Or more.
So when I hear the Chrysler retiree at church whining about his $159 deductible, I’m going to point out that he obviously can’t be doing too badly as he JUST bought a brand new Chrysler minivan.
menno: I can only dream of having insurance coverage as good, right now, when I’m working, as these Chrysler retirees are now going to have. And that is probably true of 90% of the US population. Or more. Two words: slippery slope. The days of the UAW's gold-plated health care program are over. I wonder what it will be like when the retirees start kvetching at their own union over health care, instead of their former employer. I know which one I'd rather deal with… starlightmica : The prior plan, with no co-pays and Viagra on the formulary, was unbelievably generous in this day and age. Perhaps you remember the Viagra scandal at GM, wherein employees were selling the ED pill on the black market? Surely, the new health care VEBA will sort that out as well. Let’s put it this way: if Chrysler couldn’t put a lid on its health care costs, what makes anyone think that an eleven-member committee comprised mostly of union bosses can?
Now they get to live in our world
I wish that my portion of the monthly premium was only $11. They could quadruple both the copay and deductible and still have medical coverage that is better than most. Excuse me if I don’t get all misty eyed for the poor Chrysler employees and retirees.
What, you mean a consumer who’s tying up a valuable, scarce economic resource is going to be forced to pony up a tiny tiny sliver of its cost?? That’s preposterous!
I wish I had healthcare that good. I work for a major bank and mine is $60 monthly with a $1200 annual deductable.
I woudl give anything to have it as good as a union guy.
I would think Kudos are in order for a manufacturer figuring out a way to lower legacy costs by reducing the gold-plated insurance provided retirees to silver-plated.
I would think.
GS650G “Now they get to live in our world”
Not quite, most reiree have only medicare. My parents retired with excellent benefits from their respective state and city government jobs but they had to pay 400 dolllars a month for a supplemental health care coverage to cover medicares shortfalls and they stall had no drug benefit until the recent coverage by medicare.
OK So I guy retires and figures he is going to recieve X amount of pension and X amount of benifits.Now 2 or 3 years goes by and they tell him “sorry were taking away a few things”Right,so cause he’s got a gold plated plan he’s gonn’a haft’a suck it up?All this cause Chrysler is in deep ca — ca and we do have to carry Mr Home Depot’s big pay check.
Soooo if we can f–k with long term employees benifits, why not f–k with his pension?
And we should be suprised when Ford puts 240 buyouts on the table and 234 workers take a pass?
Just when I needed another reason to mark, thanks but no thanks,on my next offer.
And thank YOU TTAC for keeping me informed.
Mikey basiclly its the retiree healthcare cost that is what is killing the detroit 3. The transplants can pay well and give their workers good benefits but what they don’y do is pay their retirees health care costs. If that issue could be resolved then the UAW wages and benefits for their workers would not place the Detroit 3 at any serious disadvantage compared to the transplants.
Yes I do agree sherman.But when I worker opts for retirement his package should be sacred.
Health cost are helping to kill Detroit but management blunders are far more effective.
Oh my god. Employees, retirees, and a union having to take responsibility for something. No more free and unlimited health care?
My sympathy factor is… zero.
The article says Chrysler is supposed to toss $10.3 billion into the trust and that “The three automakers have a combined $86 billion in retiree health care liabilities on their books that would be taken over by their trusts as of 2010.”
Gee, are C/F/GM generating enough surplus cash to cover that liability by 2010? I thought they were having trouble making a profit.
Ahah! Turns out they’re making money hand over fist. Worried UAW retirees will be comforted by this disclosure in a Detnews reader’s comment on the article: “I’ve worked along side Chrysler union people in manufacturing plants here in Detroit while in college and now a 94 level Management employee in Auburn hills; sales, marketing advertising division. …Chrysler makes $10.500 profit on average for every vehicle produced; I’ve seen the internal figures/documents.
The VEBA setup is simply the unions deciding that 60% of promised health benefits is better that the zero percent they would get from a company gone into Chapter 7 liquidation.
A reasonable decision, I think.
That 60% is not going to cover a gold-plated health plan.
Mikey,
I hope this makes all you guys realize that union promises (just like management and government promises) aren’t usually worth much. Apparently, the contract was flawed. Of course, you could have your own contract, but not in a union. You could sue individually, but not in a union. Etc.
Collectives are a bitch, aren’t they? So the question then becomes – should we make our entire country more, or less like Detroit? Maybe you should bring that up in the next UAW meeting where they discuss how they are using your money to try to do EXACTLY that with out country.