GM To UAW: Take This Job And Keep It
When the music finally stopped at Old GM, the UAW’s VEBA fund was left holding a lot of IOUs. On those merits, the union’s benefit trust was given about 17.5 percent of the equity in the bailed-out and re-organized New GM. UAW leadership has always maintained that having its membership’s benefits staked on the company’s financial performance would not change its mission, and that VEBA’s representative on GM’s board, Steve Girsky, would operate free from union influence. And one hopes he would, considering he’s being paid well to advise CEO Ed Whitacre. But the tension between GM’s IPO sprint and the UAW’s non-VEBA interests never goes away, and the Wall Street Journal [sub] is reporting that the latest spat is over the old hobbyhorse of buyouts.
If GM doesn’t thin its ranks, scores of veteran factory workers in the next few years will find themselves without jobs or unemployment benefits.Laid-off factory workers once could remain on GM’s payroll for years receiving almost full pay and benefits, but now they can remain on the rolls no longer than two years before their company-paid unemployement benefits run out.
See? Before, laid-off workers could receive full pay and benefits for years, and now laid-off workers only receive benefits for years. And now, having cut costs all over, GM isn’t interested in paying experienced workers to learn. With production steadily expanding, GM has “restored or created 9,100 jobs” since bankruptcy, and under two-tier wage structures those new workers are being paid competitively. So the old guys who are making nearly twice as much should get their own private bailouts, at the expense of GM’s financial health (on which the larger union’s benefits depend)? Time Magazine knows what’s up, and chronicles the toxic effects of two-tier wages on the union, complete with quotes like “It destroys solidarity.”
But GM doesn’t want to go back to 2006, when it paid $3.8b to buyout 34,000 workers (do the math). With today’s announcement it has essentially ruled out any further buyouts. Now it’s up to the UAW to balance its own competing interests and do the right thing.
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