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The vote is today...



Published: Thu, May 28, 2009 @ 12:04 a.m.

photo

In this Vindicator archive photo, Cobalts are seen on the assembly line at GM Lordstown.

By DON SHILLING

VINDICATOR BUSINESS EDITOR

Roy Weamer, a retired General Motors worker, is satisfied with a revised labor contract that keeps his pension intact but strips away his dental and vision insurance.

“It’s not as bad as I thought it would be,” said Weamer, 59, of Struthers.

Despite the increased expenses, Weamer and the other 8,000 retirees from GM’s Lordstown complex do not have a say in a deal that’s designed to help the automaker cut costs.

That is up to the 1,800 active workers and 2,750 laid-off workers at Lordstown and others around the country. Local voting will be from noon to 6 p.m. today at the MetroPlex in Liberty.

These workers would have their own concessions, such as suspension of cost-of-living pay, performance bonuses and an Easter Monday holiday. They also would give up the right to be paid for unused vacation.

A letter from United Auto Workers leaders in Detroit, however, stresses that the offer does not include any cuts in base pay or health- care benefits for active workers and makes no changes in pensions.

Local UAW leaders say it’s a good deal from a company that is likely to file for bankruptcy protection any day.

“These are very difficult decisions the members are asked to make,” said Dave Green, president of UAW Local 1714. “I believe it’s better for us to reach an agreement than it would be for a bankruptcy judge to make a decision for us.”

Jim Graham, president of UAW Local 1112, also said negotiated concessions are preferred to the unknown of heading into bankruptcy court without them. He said he is “very optimistic” the contract will pass.

Even with an agreement, no one can be sure what will happen to labor contracts or retiree benefits in bankruptcy proceedings because a judge can order them to be renegotiated or voided.

Weamer said he has watched other corporate bankruptcies and seen some “pretty heavy” benefit concessions forced on retirees.

“I don’t think this is the final end of it,” he said.

The agreement, which was reached by union and company negotiators last week, would not change the $23 a month that retirees who are under 65 pay for family health-care coverage. However, older retirees who receive Medicare would lose their Part B supplement unless they retired before October 1979.

Prescription-drug coverage for retirees would change slightly. A 34-day supply of medication from a retail store now costs $10 for generic and $15 for brand-name drug. The agreement would raise the brand-name drugs to $25. Retirees would lose coverage for the treatment of erectile dysfunction.

The cost of retiree health care has been a big part of negotiations between the union and GM.

The automaker owes the UAW $20 billion to fund a trust for retirees’ health-care coverage. Instead of that payment, the deal calls for GM to give the union 17.5 percent of its common stock, $6.5 billion of preferred shares and a $2.5 billion note.

In exchange for such concessions, the UAW received some commitments for future work if GM pulls off a restructuring effort.

GM agreed to use an idled assembly plant to produce compact and small cars that are not made at any other U.S. plant. The automaker also said it would reopen a stamping plant to provide parts for those cars.

The UAW said it insisted on these items because GM plans to import more cars from China and other foreign countries.

In addition, GM has agreed to name three assembly plants and one stamping plant that have been idled as stand-by locations. These plants would be reopened if vehicle sales are higher than GM predicted in a viability plan it filed with the federal government.

As for current workers, the deal includes incentives for those wanting to retire or leave work early.

Production workers eligible to retire would receive $20,000 and a $25,000 vehicle voucher if they leave, while skilled trades workers would receive the voucher plus $45,000.

Those with 28 or 29 years service would receive monthly payments until they reach 30 years, when they would receive full benefits.

Other workers would receive payments of between $45,000 and $115,000, plus a vehicle voucher, to quit without benefits.

GM is staring at bankruptcy because its efforts to restructure outside of court appear to have failed. GM’s bondholders are refusing to make concessions required by a federal automotive task force.

If it files for bankruptcy, GM hopes to emerge quickly as a slimmed-down, debt-free automaker.

shilling@vindy.com

SEE ALSO:Can GM survive bankruptcy? Analysts disagree. and Who will drive GM?.


Comments

1UnionForever(1470 comments)posted 5 years, 6 months ago

This is a hard pill to swallow. Already MSNBC is saying the UAW concessions are not enough to keep GM out of bankruptcy this morning. I guess we will just have to see. Stay strong my union brothers. We will prevail. God is with us.

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2irishfan91(97 comments)posted 5 years, 6 months ago

I don't understand why $23 per month is all the retirees under 65 are paying for FAMILY health insurance. I don't know anyone else that pays so little. It is ridiculous and they deserve bankruptcy if that is what they call a concession. Truth is the bailouts should have never happened. Good (borrowed money at that) money after bad. It is amazing to me that so many Americans think nothing of dropping that kind of money weekly on beer and cigarettes or to take their dog to the vet yet think that is a reasonable sum to pay for healthcare.

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3VINDYAK(1799 comments)posted 5 years, 6 months ago

This complicated GM mess shows us how far corporate organizations have been able to ride the economic boom without planning for significant downturns such as what we are in now.

History has proven to us that our economy runs in cycles, but many ingnored history and continued to drive on credit, credit, and more credit...until the bottom fell out. The blame goes everywhere from the halls of Congress, politicians, corporate officers, and to our own households.

This mess is sad, as it has affected us all. We, like GM, are all a bit poorer now. Some of us much more than others. GM will come out of this as a different company and do business in a different way. The results will take many years to adjust to.

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4HundredReasons(31 comments)posted 5 years, 6 months ago

"Normal" people working "normal" jobs pay hundreds of dollars a month for health insurance, and there are co-pays on top of that. The unions have been sitting fat and driving up the cost of cars to such an extent that each car has more money allocated for salary and benefits than steel. That is a sad imbalance.

To all of you, on both sides, make the concessions or watch the company disappear forever. Which is better... a job with compromise (essentially swinging the pendulum back center) or no job at all. Have some perspective and some sense of what history has shown.

While you're at it, go back to 1900 and look at how many of the Top 100 American companies are still around, then ask yourself if folks back then acted the same way you are...

I feel no sympathy for the overpaid union worker or executive, because, ultimately, I as the consumer pay for it all... or I can take my business elsewhere. I haven't bought American in 20 years and have no qualms about it. Arguments like "unionforever" just give me even more reason to stay away.

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5AtownParent(562 comments)posted 5 years, 6 months ago

I don't know where the 23.00 per month cost came from, but that is definitely not accurate. I know retirees and they pay WAY more than that a month for family healthcare.

As for the pay freezes, they have been on a pay freeze for YEARS now. YEARS. How long have many of you gone without a pay raise? And they have consistently increased their own healthcare contribution over the years.

You all are so ready to quickly condemn the workers, but put your feet in their shoes for awhile and quit being hypocritical. GM was filing with or without these concessions, the bond holders were not willing to budge an inch to keep the company out of bankruptcy. It is not the fault of the workers you all are so quickly willing to blame.

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6Westsider(224 comments)posted 5 years, 6 months ago

We all have to make concessions in this economy. I think what annoys people is that most of the GM workers barely have a high school diploma and earn these types of wages and benefits. Most of them are just jealous - but I can tell you I wouldn't want the GM jobs for all that they earn - it is boring and monotonous work - for which all the workers get is compensation. Just for the record, my hospitalization is $526 per month and people where I work are looking at 3% wage cuts. That is not a "poor me" comparison - just a statement of fact. This evidently is what President Obama meant by sacrifice.

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7boardmanneedschange(364 comments)posted 5 years, 6 months ago

Unions will be the death of the American auto industry. The original idea of a workers union to assure certain rights were given was a good idea. Now the unions are a plague on industry, forcing employers to send their jobs overseas because of the stranglehold the unions are tightening on anyone who operates a big business in the U.S. Our country is at war with itself and it is a no win situation. Auto workers should begin to re-educate themselves now for a new trade, because the auto industry is on its deathbed. Both sides are too stubborn to come to an agreement of what is fair and can continue to make a profit.

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8jimiohoh(86 comments)posted 5 years, 6 months ago

I can remember steel workers getting a 13 week vacation. That really kept the industry right here in the good old U.S.A. Unions out-lived their purpose.Just ask Joe the plumber.

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9cambridge(3096 comments)posted 5 years, 6 months ago

If it's the unions and not the decision makers in top management that ruined GM, who's fault is it that Enron, World Com, WaMu, lehman Brothers and a host of other of other companies all bigger than GM and with no connection to unions failed?

A huge problem facing GM and other companies is health care. HMOs and Insurance carriers make billions in profit and will deny treatment whenever possible. If you ever have a chance to see an itemised bill from a hospital stay for even minor treatment it will make your head spin.

The health care problem is not the fault of GM or the unions but it's a big factor in what has impacted GM's bottom line. It's easy to just point to the union and say that's the problem. In a recent interview the CEO of GM stated, "the unions are more of the solution than the problem". He also referred to mistakes by top management along with a poor economy that impacted sales. Consider all the circumstances.

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10xytown(63 comments)posted 5 years, 6 months ago

I hate to be the bearer of bad news but it ain't over until the fat lady sings... Once a bankruptcy judge get's his hands on GM more cut's for retireee's are coming.

Without cutting the retiree legacy costs GM cannot survive!!! DO THE MATH!!!

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11Stan(9923 comments)posted 5 years, 6 months ago

The fortunes of The Valley rest with the fortunes of GM and its workers. There is no easy solution for GM or its workers.

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12cambridge(3096 comments)posted 5 years, 6 months ago

I really don't know what all the concessions are that are on the table. I believe that the legacy costs you referred to are being addressed. I'm hoping that if GM, the unions and the bond holders all give a little the company can be restructured.

The real point I believe is that if health care wasn't so out of whack the legacy costs wouldn't be so out of whack.It's obviously not just GM's problem. We are all in the same boat on that one.

I hope they all work it out. I'd hate to see the valley hurt anymore than it has been.

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13irishfan91(97 comments)posted 5 years, 6 months ago

Every time someone mentions drilling the answer you hear is that it will take 10 years + before there will be any meaningful production so then we don't do it. Fact is, if we had done it 10 years ago we would be reaping the rewards of that decision now. We should drill even if we can't benefit from it until the future. I understand there is a push for "green energy" but that will not replace all of our energy needs--especially not cars. Don't hear much talk of nuclear energy. Very effective. France supplies 80% of their energy this way and we all know how the libs love France.

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14FormerYoungstowner(13 comments)posted 5 years, 6 months ago

With all the advances in science, technology, health, etc. can't we build a car that doesn't rely on gas/oil? Imagine all the job opportunities for this country. I understand that this change-over wouldn't happen overnight, but it doesn't seem that our country is really making a push towards alternative fuel. Car companies are touting new automobiles that get better gas milage, but so what? If the price of gas keeps rising, it's not going to save people much in the long run. If a company came out with a reliable, affordable car that i didn't have to fill up with gas every other day, i would definately buy it.

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15timOthy(802 comments)posted 5 years, 6 months ago

Lets see here for one minute. What's on the back of these U.A.W. backs. Are they wearing United Garments Logos on their T-Shirt ? How about when they it an oil change. Do they all go to the dealers? The products the use or buy. Are they all UNION made? We all know the answer to these guestion and that's NO NO NO. Close the doors we'll get buy. YOUR NOTHING BUT AN OVER PAID SCAB WITH NO STANDARS. Let alone helping your UNION brothers and sisters. Die Scab !

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