Labor & Employment Law — 12/08/08

UAW makes concessions to aid US auto industry as it seeks bailout funds

As CEOs from Ford, GM and Chrysler returned to Congress for another round of discussions on receiving bailout funds to aid the auto industry, delegates from the United Auto Workers (UAW) on December 3, 2008, formally agreed to move forward with concessions that are specifically designed to help the automakers. In particular, the UAW's International Executive Board agreed to suspend its jobs bank program, which had recently become a “lightning rod” issue and a “sound bite for critics of the union,”according to UAW President Ron Gettelfinger. The jobs bank program was used to help workers adjust to auto industry downsizing, but the UAW determined that it would work with auto companies to dismantle the controversial program in an effort to help the companies.

The UAW will also allow delayed payments to the Voluntary Employee Beneficiary Association (VEBA) by the auto companies. However, Gettelfinger stressed that “while the union will allow delayed payment schedule for the VEBA, the union would protect UAW retirees' health plans.” The payments themselves will be deferred, but at a guaranteed interest rate, said Gettelfinger. In addition, the 2007 national agreements between the UAW and auto industry will be open for possible modifications. However, Gettelfinger explained that with regards to any further modifications of the national agreements:

The union will convene UAW Chrysler, Ford and General Motors bargaining committees to meet with their company counterparts. We will immediately engage with our elected bargaining committees to work with our vice presidents and their staff. We will review the agreements and we are going to consider modifications. UAW members...will have final say in any changes to union-negotiated agreements. Any modifications that we make in those agreements we will take back to our membership for ratification.

On December 4 and 5 the US auto industry CEOs and Gettelfinger will testify at congressional hearings before the House Financial Services Committee and the Senate Banking, Housing and Urban Affairs Committee. The UAW will further explain their package of concessions and answer questions from congressional leadership about the issues facing both the auto makers as well as the auto unions. The executives will offer detailed plans on how they will use a proposed $34 billion in emergency bridge loans to protect the companies from insolvency. Further information regarding the UAW's concessions or information concerning the UAW can be found at http://www.uaw.org.

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