G.M. and Union in a Deal to Cut Health Benefits - NY Times 10/18/2005

[Coastie for Truth]

G.M. and Union in a Deal to Cut Health Benefits

General Motors said on Monday that it had reached a tentative agreement with the United Automobile Workers union to cut $1 billion in annual health care benefits for more than 750,000 blue-collar workers, retirees and their families as part of an effort to climb out of a financial crisis.

"This is a very big step forward that we will build on," said Rick Wagoner, G.M.'s chairman and chief executive. He called it "the single biggest cost reduction that we've probably been able to announce in a single day in the history of G.M."

Even as it disclosed the breakthrough with its union on Monday, G.M. reported a $1.6 billion third-quarter loss, its largest quarterly loss in more than a decade.

In a further reflection of its financial distress, the company, which has lost nearly $4 billion so far this year, said it would seek to sell a majority stake in the General Motors Acceptance Corporation, the financial services giant that is G.M.'s most steady profit center. The possible sale, along with the deal, encouraged investors on Wall Street.

---edited---

[Ready4Change]

1. Why don't CEO's ever cut their own benefits?

When was the last time you heard of a CEO of a major corporation cutting his own benefits and salary to save his company? That could be worth millions, would send a message of dedication and commitment from the topmost level.

Has that EVER been done?

[Coastie for Truth]

2. Story on 60 Minutes about a clothing company in Massachusetts

[Ready4Change]

4. Wasn't that years ago?

I do recall something about that. Not a huge corporation, though. Not a GM.

[Coastie for Truth]

6. I grew up in the Pittsburgh Area -- with lots of family

in the Cleveland-Akron-Canton-Youngstown area and some family in the Detroit area.

I remember when there were 100's of "small" (privately held, closely held, "Subchapter S", well under 1000 employees) machine shops, tool and die companies, specialty fabricators, sub-vendors, etc.) where as long as the original owner or his/her/their kids were "in the business" they did take pay cuts and dip into personal savings to avoid closing or cutting health insurance ("health insurance" was always a major issue -- "we got to keep them covered").

But when the "younger generation" didn't go into the business ("this is no industry for a young person, my daughter is smarter then her old dad, she went to Medical School") the acquiring company only knew one thing -- CUT, CUT, CUT.

I grew up in the Monongahela Valley "Up by Renzie Park." Saw it happen in front of my eyes.

[eglide]

3. IIRC Lee Iacocca

worked for $1 per year at Chrysler in the early 80's when he
went to Congress for help in a turnaround. Of course he did get stock options that ultimately turned out to be worth millions because the turnaround was sucessful and the market price soared.

[Ready4Change]

5. Years ago, and stock would have been valuable even had it failed.

Many CEO's really make their money through stock options, rather than actual salaries.

However, as this topic goes, Iacocca in the 80's might be the best example.

[badger1080]

7. union loyalty

I've been wondering about this lately.

How much loyalty can the union have towards retirees? You'd never see a retired managers wages cut, because they have their own agreement with the company. But the union can negotiate away retired workers benefits in exchange for fewer cuts in current workers wages.

Is this wrong?

[SharonAnn]

10. How many voted for GOP Congress, against Clinton's medical plan?

Union workers were a real target of the GOP for their 1994 "Contract on America" and their ads against "big government health care".

Many of them voted for GOP Representatives and Senators to kill "Hillarycare".

Now it looks like they would have benefited from it.

[DiverDave]

8. GODDAMN them

For YEARS they have been told that producing a fuel efficient car would, in the long run, MAKE THEM MONEY!!!

But, of course, the focus is on THIS quarters profits, and not on 3 years from now.

If I was the head of the UAW?

I would strike, AND be a hard as I could be on other unions to honor that strike.

We need another Hoffa, without the mob ties, of course.

The ONLY thing that management fears is a weak earnings report.

[sarcasmo]

9. Recommended, because this is a form of union busting.

If they don't take the cut in medical, the cut will be in wages. Kiss the unions good bye folks. Fifteen dollars an hour will be a high end wage. The twenty dollar an hour union jobs are history.