Alternate Route

Sep 28, 2007 - Deja Vu?

"This is like deja vu all over again."

So spoke the philosopher Lawrence Peter Berra on the subject of history and the possibility that it repeats itself. And there's an AP story that should remind us all about the consequences of ignoring history.

Caterpillar Inc. retirees are certainly feeling a bit of deja vu as they read the news about the settlement between GM and the UAW. GM agreed to pay the union about 70 percent of the total obligation, or around $36 billion to fund a trust established by a company and union to pay for or defray health insurance costs for retirees. 

They've been down this road already.

Back in 1998 Caterpillar and the UAW came to an agreement which also included a VEBA trust funded by $32.3 million the UAW had set aside into special training and overtime accounts.

That trust was depleted in six years. Around 20,000 Caterpillar retirees now have no choice but foot the bill for much of their medical costs.

UAW President Ron Gettelfinger says the union's projections show the VEBA will secure retirees for 80 years. GM currently has 340,000 hourly retirees and spouses.

I missed the news where healthcare costs have gone down since 1998. Or perhaps the UAW feels that healthcare costs have peaked? Gettelfinger's projection that retirees will be secure for 80 years seems wildly optimistic given his own union's experience at Caterpillar.

Negotiations
Hammering out the best deal?
Pyrrhic victory

2:48 am | Categories: gm, uaw Permalink | Alert Administrator

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