UAW Membership Starts Voting on New Contract That Leaders Have Okayed

Historic VEBA Health Care Deal Predicted to Make UAW Big Wall Street Player

September 30, 2007
By: Dave Rogers

Job security was the key goal of the United Auto Workers contract negotiations with General Motors Corporation and officials feel they have won more than they lost in the tentative deal.

The parties reached agreement after a two-day national strike and union leadership has approved the new pact.

GM is following precedent in refusing to comment on the proposed pact until the union ratification vote is in. The UAW has until Oct. 10 to complete the voting on the proposed pact.

UAW President Ron Gettelfinger said GM gave "unprecedented product guarantees" and commitments to continue to build products being made at 16 of 18 assembly plants in the U.S.

A renegade UAW member working at Delphi Corporation named Gregg Shotwell reportedly has posted on the web details of the union's tentative deal with General Motors Corporation.

Among provisions revealed by Shotwell are agreements to sell or possibly close the Livonia, Michigan, engine plant and a stamping plant in Indianapolis, Indiana.

Other plants reportedly may face closure or sale, according to the reports.

These details are unconfirmed but news services reportedly have vetted the tentative provisions with high union officials.

At the UAW Local 362 hall on Wilder Road and at the UAW Local 668 offices in Saginaw members are among local unions that will start voting Monday on a new four year contract with General Motors Corporation. Local 362 has about 500 members and Local 668 has about 700.

Flint UAW members are rejoicing about the deal that may see a new factory built on an old site at the North Engine Plant adding about 600 jobs.

Unconfirmed reports are that the new plant, slated to be built on a brownfield site, will build up to 1,200 four and six cylinder engines per day.

And most retirees are happy that their union will get $35 billion or so to fund health care into the future.

Financial analysts already are predicting that the huge pot of money will make the UAW a major player on Wall Street. Some analysts reported that the deal will give the UAW stock amounting to an estimated 17 percent stake in GM. Thus the workers will become major owners of the company in the tradition of ESOPs (Employee Stock Ownership Programs).

The possibility of a national health care system that is being talked up by Democratic nominees for President may be a boon to the UAW in the future, analysts theorized. If workers are covered under a national health plan perhaps costs against the UAW trust, called a VEBA (Voluntary Employee Beneficiary Association) may be reduced, leaving the union with a comfortable nest egg.

The two tier wage structure that is part of the new contract reduces starting wages by about half and the pact also provides for $35,000 buyouts for older workers.