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Remarks by UAW President Ron Gettelfinger to the Bay City Rotary Club, Bay City Mich., Jan. 22, 2008


Thank you, Mr. Keating for your kind introduction, and good afternoon everyone and thank you for the warm reception.

I recognize and appreciate the leadership of UAW Local 362 being in attendance including President Ray Nievierowski and Jay Swanton, Chairman. I also appreciate the local GM management for being here.

On behalf of the UAW International Executive Board and the men and women of the UAW, I want to thank the Bay City Rotary Club for your invitation to speak with you this afternoon. Your invitation is recognition of the hard work our members do every day, in our workplaces and our communities.

That kind of recognition means a lot to our members – especially when it comes from respected leaders in the community, like the members of the Rotary Club. It’s great to be here!

There is nothing more important, as far as we’re concerned, than building strong and lasting relationships in communities like Bay City – a beautiful part of Michigan, and a city with a long and proud history for our union.

Bay City holds a special place in the hearts of UAW members. When we think of Bay City, we remember UAW Vice President Jack Laskowski, who was a member of UAW Local 362 at the GM Powertrain plant here.

Jack was a wonderful trade unionist, and a person who knew how to lead and inspire others. It was our great privilege to serve with Jack on our union’s International Executive Board until his untimely death in 1999.

As a result of the 2007 negotiations with the auto companies, we believe we have succeeded in reaching an extraordinary agreement that is in the best interest of our members, our communities, and the companies we work for.

The estimates vary, but it is probably safe to say that as a result of these negotiations, the automakers will save somewhere in the neighborhood of $1,000 per vehicle.

That’s important – not because it adds to the companies’ bottom line, but because it frees up resources that can be used to invest in U.S. plants. The company’s management must exercise discipline this spring, and throughout the term of the agreement, and not reward themselves bonuses. These savings are coming from the sacrifices of our active and retired members and must not be abused.

We want to see the cars and trucks of tomorrow built in the U.S.A with this cost savings. And that means, as an example, GM Powertrains built right here in Bay City.

The savings realized by the companies is obviously important. But the picture is not complete unless we also look at the progress that was for our members made at the bargaining table.

First and foremost, we won enhanced job security for our members by negotiating unprecedented product and investment guarantees.

In Bay City, for example, General Motors agreed to continue production of key powertrain components through their current lifecycle – which means production will last beyond when our current agreement expires in 2011.

These product guarantees are incredibly important -- not just for our members and our families, but for the tax base of local communities. For local companies that supply the automakers. And for other local businesses that rely on the consumer spending that goes along with good, middle-class manufacturing jobs.

We know that the fate of our union and the fate of our communities are linked together – and we can only succeed if we succeed together.

The 2007 agreements deliver financial gains to our active and retired members, and also protects top-quality health care coverage for both groups. As has been widely discussed, we secured lifetime health care for current and future UAW retirees, including every seniority worker who was on the active rolls on September 14, 2007.

We accomplished this through the creation of VEBAs or Voluntary Employee Beneficiary Associations at each company.

We originally proposed the VEBA in 2005, when we took the step of negotiating, mid-contract, modified health care for retired workers at GM and then Ford.

Given the current state of our industry and the current state of the America’s flawed health care system, there is no risk-free way to guarantee lifetime health care coverage. Not for active workers. Not for retired workers. Not for anyone.

That’s a disgrace, because every other industrialized nation manages to guarantee health security for its citizens at a far lower cost than we pay here in the U.S. Retiree health care will be paid for by an independent VEBA trust, with funds that can only be used for that purpose. In the long run, that is more secure than a promise of health care from a company.

The independent VEBA trusts will be funded by tens of billions of dollars in cash, stock and other securities contributed by our employers. It is the largest transfer of assets from capital to labor, ever, in the history of the United States.

Because the trusts are pre-funded, Chrysler, Ford and GM can remove projected retiree health care costs from their books, which will improve their financial positions.

But we bargained hard for sufficient funding, and the independent trusts will receive up-front funding and begin earning interest right away. So we are confident the VEBAs will provide high-quality health care benefits for our retirees for the next 80 years.

Our confidence is based on rigorous analysis by internal specialists and outside experts. And, everything we do in this area is subject to court review and approval. As part of this process, UAW retirees will receive complete and timely disclosure of all relevant information. We take our obligation to our retirees seriously!

UAW retirees built our union. They spent decades of their lives helping their employers earn enormous profits. They deserve full information about their health benefits and they will receive it.

The VEBA trusts will not be run by the UAW. They will be administered by an independent board approved by federal court, which will include trustees with expertise in health care, financial management and related areas.

The trustees will manage and pay benefits for UAW retirees from Ford, Chrysler and General Motors, and oversee the long term solvency of the VEBA.

Some people have suggested that by encouraging healthier lifestyles, finding more efficient doctors or realizing efficiencies of scale, the VEBAs will blaze a nationwide trail toward lower health care costs, and everyone in America will live happily ever after.

For this to be possible, you would have to assume that our union, Chrysler, Ford and GM have been blindly writing checks for billions of dollars in health care expenses each year without making serious efforts to control costs. That is simply not the case.

The reality is that our union has worked for decades with employers, policy makers and legislators to contain costs while still providing quality health care. We created Community Based Health Care Initiatives to reduce costs.

We have, and continue to, promote wellness programs, disease management, evidence-based medicine and certificate-of-need standards.

We’ve also insisted on transparency with pharmacy benefit managers, and tough negotiations with medical providers.

The VEBA trustees will certainly continue these practices and improve on them where possible.

Such efficiencies are desirable, and are important for the VEBA trusts to succeed in their mission of providing long-term benefits to the beneficiaries they are obligated to cover.

But these measures, by themselves, do not represent a long-term path to health security for all Americans.

What's needed, as our union has long advocated, is a single-payer, universal, comprehensive national health insurance program that covers every man, woman and child in the America.

Now, it took a lot of hard work to solve a serious health care issue for several major companies and several hundred thousand retirees in the auto industry. But our work is not done so long as there are 47 million Americans without health insurance.

Our agreements with the auto companies set the stage for this task as well, by establishing a National Institute for Health Care Reform.

We negotiated commitments of $30 million from the companies over the next four years to fund the Institute. It will reach beyond the bargaining table to pursue innovative research and education efforts to expand access to health care, while also controlling costs.

We’re very proud of all we accomplished for our active and retired members during this round of negotiations. But to protect current and future jobs, and to create incentives for future investment, we also had to accept some compromises.

There will be a limited number of employees at each company, for example, who can be hired at a lower wage, with a different benefit structure.

At GM and Chrysler, the new hires will be limited to certain job functions; at Ford, the limit will be 20% of total UAW employment at the company.

By placing limits on the number of new hires, we believe these agreements will help maintain the domestic auto industry as a source of high-quality, standard-setting jobs for many years to come.

We want to protect the kind of jobs that enhance your tax base and provide solid consumer spending here in Bay City and in other communities.

We also negotiated a groundbreaking moratorium on outsourcing, which means that much of the work that is now in UAW facilities will stay in UAW facilities. With these new contracts, the companies have real incentives to retain existing work, and to return work that had been outsourced elsewhere. Protecting jobs is a top priority for members of our union. There has been a dramatic drop in employment at each of the domestic companies in recent years even during a period of record automotive sales in the United States.

GM, in the 1970s, had over 460,000 UAW-represented employees. Now, they are down to just over 70,000.

Many people will look at the 2007 UAW negotiations as the moment in time when the U.S. auto industry made a dramatic transformation. But our members recognized the need for change long before 2007.

Day in and day out, the men and women of the UAW have been working to improve our industry – and our achievements are quite impressive.

Safety, productivity, quality, you name it: Our members are setting the standards that other companies look up to. On safety: Our forward-looking, joint labor management programs seek to prevent injuries and illnesses before they happen – and other companies look to us to see how it’s done.

On quality: Everyone who looks at this question objectively knows that the quality of domestic vehicles has improved dramatically. And the vehicles made by our members have the awards from J.D. Power and other sources to prove it.

On productivity: The conventional wisdom is that non-union plants are more efficient, because union work rules are a drag on production. The conventional wisdom is wrong.

The Harbour Report, for example, is a closely-watched study which documents how many hours it takes to build a vehicle. If you read the Harbour Report closely, you’ll find that in a head-to-head competition, union plants are actually more efficient than the competition.

Trained, experienced union workers with a voice on the job add value to the manufacturing process.

When you look at what we’re doing in our plants, and what we’ve done at the bargaining table, there’s no question about it: We have set the stage for our industry to succeed.

We’ve done our part. Now it’s time for the auto companies and our government to do theirs.

Chrysler, Ford and GM must focus like never before on bringing vehicles to market that customers want to buy, at a price customers can afford to pay.

That includes responding, forcefully, to consumer and regulatory demands for greater fuel efficiency and reduced carbon emissions. The CAFE legislation recently passed by Congress will help achieve these goals.

But if you do have a chance to visit the auto show, you’ll see that all of the companies are already emphasizing green vehicles.

Chrysler, Ford and GM have spent literally billions of dollars on research and development of vehicles that can use fuel more efficiently while reducing harmful emissions.

Our members are proud to build those vehicles. We’re going to continue our work – at the bargaining table and in the political arena – to ensure that the automotive vehicles of the future are built with pride, right here in the U.S.A.

Our union is doing all we can to protect manufacturing jobs. But all of us in every industry –labor and management, union and non-union – are going to have to do more.

We must address America’s health care crisis, which is particularly hard on manufacturing companies, and on small businesses.

We must also address – together – the threat to the U.S. economy, U.S. jobs and U.S. consumers that has been caused by our failed trade policies.

Our trade deficit costs us $2 billion a day, and is over $500 billion dollars in the first ten months of 2007. It’s an enormous transfer of wealth to other countries, which cannot be sustained indefinitely.

Nearly one-fifth of that deficit, more than $100 billion is accounted for by just one category of manufactured goods: Motor vehicles and parts.

These numbers will get worse if the proposed U.S.-Korea Trade Agreement is passed into law. It’s another one-sided trade deal that will further open our borders to Korean products, while doing little or nothing to require the Koreans to reciprocate.

Last year, South Korea sold around 700,000 vehicles in the United States and all U.S. manufacturers combined exported somewhere in the neighborhood of 7,000 to South Korea.

That’s not free trade. That’s not fair trade. That’s a disgrace. The proposed U.S.-Korea trade agreement won’t solve the problem. Congress should reject it and tell the Bush Administration to start over.

The reality of our flawed trade policies hit home for many Americans this year, with repeated recalls of contaminated toys, contaminated food and other unsafe products.

For years, our nation has opened its doors to products from all over the world, without any meaningful safeguards for workers, the environment or consumers. Now, we’re paying the price.

The answer is not to build walls around our country. The global economy is here to stay, and the exchange of goods and services between nations can be beneficial to all parties, if proper standards are enforced.

We don’t need walls. We need better trade agreements.

That means rigorous inspections and other procedures which allow in safe products but which keep out products that don’t meet internationally-recognized standards. Those standards must include protecting the human rights and workplace rights of workers overseas.

If a toy comes into this country contaminated with lead paint, it was produced in a factory that is contaminated with lead paint.

In a global economy, the health and welfare of our own children is directly tied to the health and welfare of workers overseas.

That’s just one of the reasons we must insist that our trading partners respect the rights of workers. Because workers who have a voice on the job will use it to remove hazardous substances from their workplaces, which means there is less chance that hazardous products will end up in our homes.

There’s another reason that we, as Americans, must be advocates for the workers who make the products we use every day: Because it’s the right thing to do.

We built a middle class – in communities like Bay City -- by creating a strong labor movement. Workers joined together to lift themselves out of misery, to turn bad jobs into good jobs and good jobs into better ones.

The resulting prosperity created tens of millions of consumers whose spending power has been the engine of economic growth in this country, and in other countries, for many decades.

But now, the growing gap between the rich and the poor – both nationally and globally – threatens to undermine years of social and economic progress.

We believe we can do better. At the bargaining table in 2007 -- when many said it couldn’t be done -- we went to work, set aside old ways of doing business, and hammered out new solutions to today’s problems.

If labor and management in the auto industry can find common ground, then we can also find common ground to address our environmental problems, America’s health care crisis, and our mounting trade deficit.

Will it be easy? No! But it can be done.

It can be done in the spirit of compromise. That doesn’t mean giving up on our own values or vision – but it does mean searching as hard as we can, for a common vision and those shared values which move us forward.

It can be done if we respect the values you practice here in Bay City, and that your fellow Rotarians practice all over the country: Helping your neighbors. Respect for one another. Giving back to your community.

We all know that this won’t be easy, but we can promise that members of the UAW are ready to be your partners -- and we are ready to work with you to improve our communities, and improve our country.

Thank you again, for the recognition you have shown to the members of our union, and thank for the opportunity to be with you here this afternoon