GM's Friday Unpleasantness: $1.6b Into VEBA and $140k Per Worker to Close Moraine SUV Plant
Whew! Quite the headline. But that’s how GM rolls these days: save the bad news for Friday afternoon and couch it as “cost savings,” “re-sizing” or some such nonsense. Anway, Reuters reports that The General’s hammered-out a deal with the International Union of Electrical, Radio and Machine Workers (IUE-CWA) union to close the ailing American automaker’s Moraine, Ohio SUV plant, home of the deeply unloved Chevy TrailBlazer and GMC Envoy. As it says above, GM will pay $1.6b into a health-care trust (VEBA) for IUE-CWA retirees and offer 1500 union members up to $140k each to head for the bar to talk about “the good old days.” The IUE-CWA pronounced itself satisfied with the deal. “It’s like getting paid not to breed Dodos.” No, seriously, union reps said they’d set up a board to manage the VEBA account which will take effect in January 2012. Now, I know what you’re thinking. Did someone forget to tell the union that GM’s heading for Chapter 11? Nope. But when faced with the inevitable, what were their options? See you in court, fellas.
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IUE were the folks who put those kick-ass Frigidaire appliance plants in Dayton in the dumper. And yes they were excellent machines - my 70s washer and dryer only died off a few years ago - but GM couldn't compete on cost with GE, Whirlpool and the like who had non-union or weak union plants. Both the UAW and IUE seem pretty confident about the VEBA being funded post Chap 11. I'm not so sure myself. Then again if the govt rides to the rescue, maybe they get the money, or at least a bridge to Medicare.
Seems to me like a sweet deal for the union members. Where is it written that they are entitled to lifetime employment on their terms? A going-away present of $140,000 is like three years severance pay. How many retirees will benefit from that $1.6 billion VEBA? If there are five retirees for every active employee, the trust will have more than $200K per beneficiary. That should pay for (excuse the expression) Cadillac coverage for retirees and spouses.
Just a correction....GM did wait till Friday to announce this, but did do it before the market closed.....the AP reported this at 12:35 in the afternoon on Friday