By Frank Williams
November 21, 2007
Although 79 percent of Ford's UAW workers approved their new contract, it now appears that not all these yea sayers didn't understood what they were voting for. While only 16 percent of GM's contributions to the union-controlled VEBA health care superfund will take the form of stock or assets, almost half of Ford's VEBA payments will be company paper. As– I mean "if" Ford stock drops, the amount of money available for retiree's health care will also drop. In spite of UAW president Ron Gettlefinger's assertion that the VEBA will shield workers from bankruptcy, Fitch Ratings analyst Mark Oline told Bloomberg this arrangement "does not achieve one of the primary goals of the UAW– a separation between the financing for retiree health care and the fate of Ford." One worker warned the new reality "may cause problems in the plants." But what can they do? A strike or even a work slowdown could push the company into bankruptcy. With The Blue Oval in hock up to its logo, Chapter 11 would leave very little for the VEBA once all other debts were paid.
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POWERED
November 21st, 2007 at 11:49 am
Gee workers having a direct tie to the company so if it goes down they loose, who’d ah thunk it.
November 21st, 2007 at 12:02 pm
Ummm…how would the fate of Ford NOT be important to retiree health care?
Do unions know absolutely NOTHING about how economics work??
November 21st, 2007 at 2:32 pm
“if Ford stock drops” – Ford stock is down almost 30% since its 52 week peak this past summer.
November 21st, 2007 at 4:45 pm
All the UAW has to do is set up some sort of hedge – sell a certain amount of Ford stock for Toyota / Honda paper….
November 22nd, 2007 at 12:59 pm
Don’t you just love it!! Only in Amerika could the workers end up owing the company. And you say Marx was all wrong!
November 22nd, 2007 at 3:44 pm
I see that picture and can´t help but wonder: Why is Gettelfinger better dressed than bill Ford? any ideas?
November 23rd, 2007 at 10:55 am
well, it might actually prove to be a genius move on the part of the uaw. what if in the long run ford stock goes up? doesn’t that mean the retiree’s will have a surplus? it’s not as crazy as is it seems. with the dollar so low and probably going lower in the long term it starts to become cost effective to manufacture in the states even for export. it’s all a question of quality. if ford can learn how to build toyota / honda quality product, it could actually recover from this mess and the veba would benefit handsomely. the downside is that this is a pretty risky strategy for a retirement / healthcare strategy.