Health care fight goes on

Retired workers greet President Gettelfinger at a health care rally on the opening day of talks with General Motors.

As we are well aware, collective bargaining does not take place in a vacuum. What happens at the bargaining table is significantly affected by what’s happening beyond the bargaining table.

This is true for all negotiations, and the UAW’s 2007 National Negotiations with Chrysler LLC, Ford Motor Co. and General Motors Corp. have been no different.

When the auto unions in other industrialized countries sit down to negotiate a collective bargaining agreement with the automakers, there’s one issue that’s off the table: health care for active and retired members. That’s because these countries all have some form of national health care that covers everyone.

Of course, that’s not so in the USA. Our patchwork, employer-based health care system leaves out 47 million Americans and underinsures millions more while costs continue to skyrocket year after year. Our union continues to push for a single-payer, universal, comprehensive, national health care program, but meaningful health care reform has yet to occur.

So in this set of national auto negotiations, we faced an uphill battle protecting health benefits, especially for our retired members. The companies demanded benefit reductions and cost shifting, and argued they had the right to reduce or eliminate retiree medical benefits which they had already done to salaried, nonunion employees.

According to our country’s labor laws, retiree health care benefits is considered a “permissive” topic for bargaining, while health care benefits for active workers is a “mandatory” topic. That means that the employer cannot be forced (by strike action or otherwise) to bargain over retiree health care benefits. Additionally, companies are not required to fund retiree health care as they fund pensions. And, there’s no government backstop for retiree health care such as we have for pensions through the Pension Benefit Guaranty Fund.

However, the goal of the national negotiators was clear from the beginning: We would protect our health care for active and retired members at current levels — period.

Our union selected GM as the lead company because we believed that negotiations there afforded us the best opportunity to establish a pattern that would ensure lifetime benefits for our current retirees as well as future retirees. We demanded that every seniority employee as of Sept. 14, 2007, would have lifetime benefits when they retired.

To achieve this goal, the UAW enlisted assistance from outside experts, including Lazard Freres and Milliman, two of the best investment banking and actuarial firms in the country.

After months of study and weeks of intensive negotiations, GM agreed to a mechanism that would achieve our goal: the establishment of a Voluntary Employee Beneficiary Association (VEBA). Because it is an independent trust, the money in the VEBA can only be used for health care benefits.

Even if a company filed for bankruptcy, the money in the VEBA would stay secure.

The funding for VEBA comes from several sources, including sacrifices from the active workers. For example, the 2006 wage increase was deferred by our members at GM and Ford, along with continued and additional COLA diversions. Billions will be contributed by the companies. Significantly, the UAW also was able to win “backstop” payments that will be made any time the VEBA’s funding level is projected to be insufficient 25 years out to provide current benefit levels. The funding calculations are based on projections about medical inflation rates, investment returns and other factors.

According to our experts’ calculations, the VEBA will be solvent for 80 years.

And, because the VEBA is an independent trust, it is important to note that regardless of what has been stated by the media, our union will not control the funds.

It’s worth stating again: The VEBA money will only be used for retiree health care benefits.

We began the national auto negotiations with the slogan, “Fighting for America’s Future.” And with “teamwork in the leadership and solidarity in the ranks,” the UAW won an agreement that keeps auto jobs in the United States. And by protecting retiree health care, we’re also keeping our obligation to those who came before us and to whom we owe so much.

Ron Gettelfinger