Latest Solidarity Issue

VEBA funding modified

Trust to receive cash, stock contributions from automakers


As part of agreements to meet U.S. Treasury Department conditions for continued financial aid to GM and Chrysler, UAW members have ratified agreements to modify the structure of the Voluntary Employee Beneficiary Association (VEBA), the independent trust established to pay health care benefits for retirees from each company.

The trust is expected to diversify assets to provide the greatest possible level of protection for UAW retirees.

Earlier this year, workers at Ford Motor Co. ratified a change in VEBA structure, in response to billions of dollars in losses at that company.

At all three companies, contributions to the VEBA are now partly in cash and partly in stock, which means that available funds to pay retiree health care benefits will be impacted by the financial performance of each firm. Benefit levels will also be affected by the rate of health care inflation, and the progress achieved in reforming the overall U.S. health care system, which remains out of step with the universal, cost-effective systems that are in place in other industrialized countries.

An 11-member board of directors, consisting of six independent directors approved by the courts, and five UAW designees, will administer the VEBA, although accounts for retirees from each company are separate and cannot be intermingled. The VEBA trust, not the UAW, will hold stock received from each company, and has the right to nominate – with UAW approval – a member of the board of directors at GM and at Chrysler.

Consistent with sound fiduciary principles, the VEBA trust will not seek to be a long-term holder of stock in individual auto companies. Instead, the trust is expected to sell shares of individual companies and diversify its assets in order to provide the greatest possible level of protection for UAW retirees.

VEBA directors now have the authority to modify the benefits available to UAW retirees to match available funding sources as of Jan. 1, 2010, when the trust takes over responsibility for paying benefits.

Changes in the VEBA structure are subject to court approval.

All affected UAW retirees and surviving spouses will receive, by mail, detailed notices of the proposed modifications.

Active, retired workers contribute to industry restructuring

Active, retired workers contribute to industry restructuring


<p>Vice President Cal Rapson, left, and President Ron Gettelfinger at a news conference May 29</p>

Vice President Cal Rapson, left, and President Ron Gettelfinger at a news conference May 29

With Chrysler and GM both facing bankruptcy and a catastrophic liquidation that could have eliminated hundreds of thousands of jobs in the midst of a deep recession, active and UAW members agreed to additional sacrifices, on top of concessions made in 2005, 2007 and 2008.

Contributions by active workers in the 2009 Chrysler and GM agreements include:

• Performance bonuses and cost-of-living adjustments eliminated for the remainder of the contract.

• Reduced holidays.

• Scaled back overtime and relief time rules.

• Wages for new "entry-level" employees were frozen, and the company was allowed to increase the percentage of its workforce employed at this much lower rate.

• Certain job security programs were suspended, and supplemental unemployment was scaled back for laid-off workers.

• Job classifications reduced and work rules adjusted.

Retired UAW members at Chrysler and GM will also share in the contributions required to help these companies emerge as smaller, more competitive enterprises:

• Retirees enrolled in Medicare Part B premium will now pay $76.20 a month for coverage, a premium that had previously been paid by employers.

• Prescription drug co-pays increased.

• Dental and vision benefits eliminated.

• Premiums and deductibles were increased for retirees with pensions less than $8,000, thereby tracking increases that were previously implemented for all other retirees.

• Voluntary Employee Benefit Association funding was restructured.

The concessionary agreements meet conditions set out by the U.S. Treasury for continued financial support to GM and Chrysler, saving tens of thousands of jobs at these companies, and hundreds of thousands more at suppliers, dealers and other businesses that benefit from the purchasing power of autoworkers and manufacturing employers.

In addition, UAW members won commitments from GM and Chrysler to source small car production in the United States, and enhanced rights to review investment and sourcing decisions at both companies.

VEBA trustees name Stephen J. Girsky to board of General Motors

06/18/09

DETROIT -- The trustees of the Voluntary Employee Beneficiary Association (VEBA) for retired UAW-represented workers at General Motors have named Stephen J, Girsky as a director of General Motors.

The VEBA trustees have the right to name a director of the corporation, with consent of the UAW. Girsky is president of S.J Girsky and Co., an advisory firm based in New York.

He has 20 years of automotive experience, having served as a managing director and senior analyst of the Morgan Stanley Global Automotive and Auto Parts Research Team. The team was ranked No. 1 for 14 consecutive years by Institutional Investor's "All-American Research Team” and the Greenwich Associates poll.

VEBA Trustees name James J. Blanchard to board of Chrysler Holding, LLC

06/10/09

DETROIT: The trustees of the Voluntary Employee Beneficiary Association (VEBA) for retired UAW-represented workers at Chrysler have named James Blanchard as a director of Chrysler Holding, LLC.

In accordance with the agreements establishing Chrysler Holding, LLC, the VEBA trustees have the right to name a director of the corporation, with consent of the UAW. Other company directors will be named by Fiat, the U.S. government, and the government of Canada.

Blanchard is a former member of Congress from Michigan, former governor of Michigan, and former U.S. ambassador to Canada.

In his public and private sector roles, Blanchard has wide experience in the auto industry, international trade and related issues.

UAW GM local union leadership endorses tentative settlement agreement

05/26/09

UAW local union leadership representing UAW members at General Motors facilities across the country today voted unanimously to recommend for ratification a new settlement agreement that modifies the 2007 UAW-GM National Agreement as well as changes to the Voluntary Employee Beneficiary Association trust for retiree health care.

The settlement agreement will be voted on by UAW members at GM this week.

Details are being withheld pending ratification.

 

 

UAW reaches tentative understanding with U.S. Treasury and General Motors

05/21/09

DETROIT -- The UAW has reached a tentative understanding with the U.S. Treasury and General Motors on an addendum to the 2007 UAW GM collective bargaining agreement. The tentative understanding contains modifications to the labor agreement and to the independent Voluntary Employee Beneficiary Association (VEBA) trust.

Details are being withheld pending explanation and ratification meetings for UAW GM members, which are in the process of being scheduled.

Chrysler Update: Chrysler Bankruptcy Process

05/04/09

 

  • The UAW ratified agreements, on April 29, 2009, that contained adjustments to the contract and modifications to retiree health care. The agreement adjustments and modifications were negotiated with the United States Treasury and Chrysler/ Fiat. 
     
  • The overall agreement with Treasury includes many components -- the Fiat alliance, the new government loans, continuation of the pension plans, the labor agreement modifications and the new retiree medical agreements. The UAW is a full partner in this process and is supporting all these agreements.

     

  • In order to obtain quick court approval of these agreements, the Treasury Department urged Chrysler to file for bankruptcy on April 30, 2009.

     

  • The agreements regarding the retiree health program were submitted to the bankruptcy court on Sunday, May 3, 2009, along with the agreements on all the other components.

     

  • The UAW, Treasury, Chrysler, Fiat, and Chrysler’s largest banks are all supporting quick approval of these agreements. The UAW has hired bankruptcy experts from two New York law firms who are working with our in-house lawyers to represent the UAW and our retirees in the bankruptcy proceedings.

     

  • On Monday, May 4, 2009, the Bankruptcy Court will be asked to allow the approval process to move forward very quickly. If that process is approved, a mailing will be sent to all UAW Chrysler retirees later in the week. That letter will include a notice from the court and a letter from UAW President Ron Gettelfinger and UAW Vice President General Holifield along with Class Counsel from the 2007 court approval process, Bill Payne, describing the agreements and UAW support for the agreement.

     

  • That letter will describe the proposed retiree medical agreements, which are fully consistent with the agreements ratified last week.

     

  • A hearing on final court approval will likely be scheduled for later in May. Retirees have the right to submit objections to the proposed agreements if they wish. The process for objections and for obtaining full legal documentation of the proposed agreements will be described in the notice that retirees will receive in the mail.

     

  • Retirees do not need to take any action now. The UAW supports court approval of these agreements. We are not asking retirees to file objections. If the Bankruptcy Court approves the agreement later this month, retirees will receive more detailed information about the new benefit program in the coming weeks.

     

  • While this process is developing in the Bankruptcy Court over the next few weeks, there will be no changes to medical benefits or pension benefits.

     

  • Under the agreements, there will be no change in the pension plan and those benefits will continue.

 

UAW members ratify Chrysler settlement agreement

04/29/09

DETROIT - UAW members at Chrysler have ratified a settlement agreement with Chrysler, Fiat and the U.S. Treasury.

Eighty-two percent of production workers and 80 percent of skilled-trades workers voted for the agreement in balloting that took place at UAW Chrysler locations throughout the United States. Ninety percent of office and clerical workers voted in favor of the agreement, and 94 percent of UAW-represented Chrysler engineering workers voted for approval.

“This has been a challenging time filled with anxiety and uncertainty for our membership,” said UAW President Ron Gettelfinger. “Our members have responded by accepting an agreement that is painful for our active and retired workers, but which helps preserve U.S. manufacturing jobs and gives Chrysler a chance to survive.”

UAW Vice President General Holiefield, who directs the union’s Chrysler Department, said: “Once again, UAW members have stepped up to the plate and acted responsibly. If other stakeholders will join us in making difficult sacrifices, Chrysler will have a chance to rebuild and participate in the eventual recovery of the U.S. vehicle market.”

The concessionary settlement agreement, which will take effect on Monday, May 4, meets U.S. Treasury requirements for continued loans to Chrysler Corporation. It includes modifications to the union’s 2007 collective bargaining agreement with Chrysler and modifications to the Voluntary Employee Beneficiary Association (VEBA) trust.

The settlement agreement includes commitments from Fiat to manufacture a new small car in one of Chrysler’s U.S. facilities, and to share key technology with Chrysler.

UAW reaches settlement agreement with Chrysler, Fiat and U.S. Government

04/26/09

The UAW announced tonight that a settlement agreement has been reached with Chrysler, Fiat and the U.S. Treasury Department.

When Chrysler’s Feb. 17 viability plan was rejected, President Obama gave Chrysler workers and the company a second chance, union officials said. This concessionary agreement, while painful, takes advantage of this opportunity.

The settlement agreement, subject to ratification by UAW members at Chrysler, meets the requirements of U.S. Treasury Department loans to the company. It includes modifications to the union’s 2007 collective bargaining agreement and the Voluntary Employee Beneficiary Association (VEBA) trust.

“We recognize this has been a long ordeal for active and retired auto workers and a time of great uncertainty,” said UAW President Ron Gettelfinger. “The patience, resolve and determination of UAW members in these difficult times is extraordinary, and has made it possible for us to reach the agreement we will present to our membership.”

“In the face of incredibly trying circumstances,” Gettelfinger said, “UAW Chrysler members have risen to the occasion, day in and day out, building top quality vehicles in a productive manner.”

“We’ll present the details of this settlement agreement directly to our members,” said UAW Vice President General Holiefield, who heads the union’s Chrysler Department. “Our ratification process must be completed on Wednesday, April 29.”

“Once again,” said Holiefield, “our active and retired members are being asked to make extraordinary sacrifices in order to help Chrysler return to viability. In order for the company to have a sustainable future, all stakeholders will have to show the same willingness to contribute to the common good that has been demonstrated repeatedly by our membership.”

 

 

Ford workers ratify contract modifications, changes to VEBA funding

03/09/09

DETROIT -- UAW members at Ford Motor Co. have ratified modifications to the UAW Ford 2007 labor agreement, as well funding changes to the independent Voluntary Employee Beneficiary Association (VEBA) trust for retiree health care.

Fifty-nine percent of production workers and 58 percent of skilled-trades workers voted for the agreement in balloting that took place at UAW Ford locations throughout the United States.

"Once again UAW members have stepped up to make the difficult decisions necessary to deal with the reality of the current economy, the deteriorating auto industry as a whole and specifically the negative impact the economic climate is having on Ford Motor Co.," said UAW President Ron Gettelfinger.

"We are focused on doing everything possible to rebuild a great industry and keep manufacturing jobs in the United States," Gettelfinger said. "As we have stated many times, in order to succeed, shared sacrifice will be required from all stakeholders, including executives, directors, shareholders, bondholders, dealers and suppliers."

"We are facing an unprecedented loss of sales and revenue at Ford," said UAW Vice President Bob King, who directs the union's Ford Department. "Our bargaining committee made an extraordinary effort to negotiate changes in a responsible way that will help Ford be competitive, while still protecting our active and retired members.

"The voting results show that our members are prepared to make painful sacrifices in order to be part of the solution to the problems facing Ford and the U.S. auto industry."