Auto Union Gets $30B Health Fund

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The New York Sun

DETROIT — General Motors Corp. will put $29.9 billion into a fund for retiree health care and guarantee that cars and trucks will be built at 16 American plants as part of its tentative contract agreement with the United Auto Workers, according to a summary of the agreement released today by the union.

GM will pay an additional $5.4 billion to fund retiree health care while the UAW is setting up the health care trust which it will manage. The formation of the trust, called a Voluntary Employees Beneficiary Association, or VEBA, was a major part of this year’s contract agreement. GM has around 340,000 retirees and spouses.

Under the tentative contract, 3,000 temporary workers will get permanent jobs at the full-time wage rate. There also is a moratorium on outsourcing.

Hourly workers will get economic gains totaling $13,056 over the life of the four-year contract, the UAW said. But some workers will be getting less than before.

New hires who aren’t doing direct manufacturing jobs, such as groundskeepers, will make between $14 and $16 an hour, according to the summary. Manufacturing workers would make a starting wage of $28.12 under the new contract. There are 16,000 people doing non-core work in American plants, the UAW said.

The tentative contract passed a hurdle earlier today when UAW officials from across the American approved the pact.

UAW President Ron Gettelfinger said at a news conference that local union leaders will now take the pact to the 74,000-strong membership for a vote. He said the voting would wrap up and be counted by October 10.

Mr. Gettelfinger called the guarantees on building cars and trucks at American plants “unprecedented” and said he expects the tentative agreement to pass, although some members have concerns about its terms.

“We’re happy with this stuff,” he said.


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