United Auto Workers Boss Ron Gettelfinger held an emergency meeting with union local officials in Detroit today to discuss possible concessions aimed at bolstering the case for an automaker bailout. The result of that meeting was an agreement to suspend the union’s controversial Job Bank program, and to allow the D3 to delay making payments to the VEBA retiree health care trust in 2010. The VEBA fund has long been posited as a potential solution to Detroit’s liquidity issues. Reuters reports that the UAW would consider other changes to the 2007 labor contract with the American automakers, but that all changes must still be approved by union members. Gettelfinger called the decision “the responsible thing to do,” noting that discussions with the automakers are ongoing.
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Can anyone comment on where the VEBA would rank in a Chap 11 workout?
It wouldn’t. The rightful owners are actually counted out as well as large number of bond holders.
You need to look closely at the wording: “suspend the job bank”. That sounds good, and I’m sure when Washington (and the public) hears “suspend the job bank”, they’ll think “great! they’re doing their part to save money, lets bail them out”. But what if “suspend the job bank” means, “no more people are allowed to enter the job bank”, i.e., suspend admittance into the job bank? I’d be more happy if I heard “get rid of job bank completely and immediately”.
Yeah, I found the wording “suspend” a little disconcerting. Thats fine though if they agree to “suspend” it until the loans are totally paid back.
If it’s suspended, will those who would have been in it get a big chuck of back pay for non-work at a future date?
The main thing the negotiations didn’t include: any reduction in the pay of existing workers.
The touted savings of the current labor contract won’t be there at current sales levels, because the lower wages only apply to new hires. And who’s hiring?
Personally, I don’t want any of my tax dollars going to VEBA at all. Since it’s probably impossible to separate or identify where any bailout $ would be spent, that means no bailout at all.
One way of looking at the UAW cost to the American car buyer would be to assume the often quoted $1600 per car disadvantage the Detroit makers attribute to “legacy” costs (which I assume is mostly retirement and medical insurance costs) is a “UAW tax”. Just to make an example, all American car buyers have paid this tax over say the past 10 years.
Since GM has set a floor pricing level in the market, Toyota, et. al. have happily sold their product at a good profit margin, and just as happily, have collected the “UAW tax” for themselves.
So, an approximation for the amount of money that American car buyers have already contributed to the “UAW tax” would be something like: 15M annual car sales x 10 years x $1600 = $240 Billion! I no longer want to contribute.
A chapter 11 bankruptcy (or something concocted to be essentially the same thing by Congress) is the only way for these companies to rid themselves of these competitive killing burdens.
Gettelfinger called the decision “the responsible thing to do,” noting that discussions with the automakers are ongoing.
So in other words, they were irresponsible for their earlier decisions?
Way to reach deep and make the big sacrifices – let’s see:
1. “Suspend” a program that is a PR disaster for both the OEM and UAW.
2. “Delay” payments for gold platted health care that the rest of the US does not enjoy that the OEM’s can’t afford to fund anyway.
Nothing to see here. Move along.
Average Assembly Line GM Salaries
The average salary for Assembly Line GM jobs is $64,000.
In comparison this assembly line gm salary is:
$26,000 more than the average salary for assembly line
Average Assembly Line GM salaries can vary greatly due to company, location, industry, experience and benefits.
This salary was calculated using the average salary for all jobs with the term “Assembly Line GM” anywhere in the job listing.
http://www.simplyhired.com/a/salary/search/q-Assembly+Line+GM/q_1-assembly+line
The jobs, hard to come by in an industry that’s shrinking, might be monotonous and hard on the body, but the workers who have them know they’ve got something special: benefits and job security unparalleled in the rest of the country. . . . On average, active union members cost automakers $130,000 a year, whether they are working or not, according to the Center for Automotive Research.
http://www.usatoday.com/money/autos/2006-03-28-buyout-packages_x.htm
Health Care Costs per Vehicle in 2004
Source: 2005 Harbour Report & A.T. Kearny Inc.
GM:
$1,525
Toyota:
$201
Average Labor Cost per U.S. Hourly Worker
Source: GM & Toyota
GM:
$73.73
Toyota:
$48
http://www.npr.org/news/specials/gmvstoyota/
Is that poster with the snake actually an UAW poster?.
If it is, the company allowing that parasitical union inside its guts really deserves to die.
So the UAW might maybe consider some more concessions maybe, and Big Rick might think about working for a dollar, for a while, maybe. It’s like they are all dipping their toes in when they should have been swimming for their lives 2yrs ago.
@ Spaniard
funny thing is that UAW local is at Freightliner Truck in North Carolina