UAW Dissidents Denounce Health-Care Shift

General Motors employees leave at the end of their shift at the powertrain plant in Warren, Mich. GM's contract with the UAW expired Friday night, but the two sides are still negotiating.
General Motors employees leave at the end of their shift at the powertrain plant in Warren, Mich. GM's contract with the UAW expired Friday night, but the two sides are still negotiating. (By Paul Sancya -- Associated Press)
By Sholnn Freeman
Washington Post Staff Writer
Tuesday, September 18, 2007

DETROIT, Sept. 17 -- A group of dissidents in the United Auto Workers and some former top UAW officials are trying to build momentum to defeat any contracts reached between the union and the three Detroit automakers if the deals include provisions for a controversial health-care trust fund.

The trust fund and its acronym, VEBA, for voluntary employees' beneficiary association, are gaining notoriety at unionized auto plants around the country. "I think the membership has been developing suspicions over the first week or two because VEBA is becoming a household word," said Ron Lare, 60, a Ford worker and member of UAW Local 600 in Dearborn, Mich., who is to retire next year. "Somebody is messing with their health care, and that in broad terms is getting through."

The trust fund has emerged as the centerpiece of four-year contracts being negotiated between the union and General Motors, Ford and Chrysler. The automakers are seeking to shift $95 billion in future retiree health-care and other benefits from the companies' books, and the union reportedly is negotiating contract terms that would allow such a move.

Under scenarios outlined by analysts, the automakers would pump billions of dollars in cash and possibly stock into the trust fund. But because the financially strapped companies don't have all the money up front, the trusts could start out underfunded by billions of dollars.

Negotiators for the union and GM, the lead company in this year's talks, continued bargaining Monday, three days after their contract expired. A source familiar with the talks said the company and the union have worked out terms of the trust fund, including a provision that would guarantee retiree benefits even if investments in the trust don't perform well or if health-care costs rise dramatically.

The source, who spoke on condition of anonymity because the talks are private, said negotiators are likely to be working on contract language on wage scales and work rules. However, other sources say work remains to be completed on VEBA issues, as well as several others.

UAW officials did not return phone calls seeking comment.

Soldiers of Solidarity, a two-year-old UAW dissident group, is holding conference calls to spread information about the trust fund and other possible contract provisions, such as proposals to give newer workers lower wages and benefits and to hire more temporary workers and subcontractors.

The group is circulating a petition online and distributing "red flag" fliers warning of the coming contract changes. As the closed-door negotiations continue, the group is awaiting full contract details so it can distribute information to members, who may have as few as two or three days before voting on ratification.

"I have no doubt that Gettelfinger is ready to make concessions, but he knows he has to sell that," said Gregg Shotwell, leader of the Soldiers of Solidarity, referring to UAW President Ronald A. Gettelfinger.

On Sunday, three former UAW executive board members sent an open letter to union members, expressing "grave concerns" over reports that the UAW was negotiating toward creation of a trust fund. The letter said the VEBA would "undo decades of hard won healthcare benefit protections, paid for in large part by wage diversions, past concessions, and increased worker productivity."

The letter was signed by Paul Schrade, an 82-year-old former UAW official in California whose involvement with the union dates to the time of UAW founder Walter Reuther. Warren Davis and Jerry Tucker, two former UAW international executive board members, also signed.

Schrade, in an interview this week, called the trust fund a radical concept that represented a step back from the union's six-decade-long struggle for universal health care in the United States.

"If GM shifts the burden of administration over to the union, they have no responsibility at that point -- no care in the world to go to Congress to achieve universal health care or health care for their workers," Schrade said. "They are free and clear, and it becomes more of a problem to get a decent health-care system in this country."

UAW members have long enjoyed top-notch health-care coverage, including no monthly or weekly premiums and low costs for prescription drugs and doctor visits.

Such guarantees date to the early 1950s, when American companies and powerful industrial unions like the UAW agreed to offer health coverage after a failed campaign by President Harry S. Truman to create a national health-care system.

U.S. automakers went along with the system as part of an effort to tame the radical union movement and build a sense of company loyalty among workers. But the companies paid little attention to escalating medical costs, which were rising steeply even in the '50s, according to labor historian Nelson N. Lichtenstein.

At the time, the labor force in the industry was young and the programs were small and not burdensome. Over the years, however, the UAW pushed for more in each contract. Today, the average age of autoworkers at GM, Ford and Chrysler ranges from the late 40s to the early 50s, and paying for retirement benefits is a key issue as more workers retire.

Schrade said health-care benefits have long been administered jointly by both the company and the union, and "it seems to me that kind of policing by both sides of each other is a safer way to protect our health benefits."

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