UAW Takes Care Of Itself In Deal With GM

It was a strike that was suppose to be about job security, but it looks more like a self-serving plan for the UAW. The AP is reporting on a tentative settlement to the 2-day-old strike against GM by union workers. "The two sides gave no other details, but a person briefed on the contract told The Associated Press that it also would give workers bonuses and lump-sum payments and would pay newly hired workers at lower rates." "GM and the UAW confirmed that the deal creates a GM-funded, UAW-run trust to administer retiree health care."

So the union is going to take charge of a retiree health care plan which GM funds. GM will reportedly shift about $51 billion of its unfunded liability for the retiree benefits to the UAW and contribute $36 billion to fund the trust. The union will be responsible for investing that money and managing the health care plan for 340,000 GM workers. Newly-hired workers will be paid less to deal with a $25-per-hour disparity between what GM labor costs compared to its Japanese-owned competitors, while wages for current workers will remain the same. Bonuses or lump sum payments will be offered to those workers in lieu of annual pay raises over the next four years. Looks like a long-term solution to me. Or not.