Details of General Motors contract underscore UAW betrayal
The Journal described the transformative significance of the contract as follows: “For much of the past half century, Detroit’s Big Three auto makers had collaborated with the UAW to create an industrial aristocracy of blue-collar workers whose pay and benefits set the standard for the American middle class. If the proposed contract announced yesterday is ratified by union members—and is subsequently replicated at Ford Motor Co. and Chrysler LLC—that era in American industrial history may be over.”
The lynchpin of the agreement is a proposal to free GM of its obligation to pay health care benefits to its nearly 400,000 retirees and their dependents by setting up a multi-billion-dollar union-controlled trust fund—known as a Voluntary Employees’ Beneficiary Association, or VEBA—that will pay out benefits. In addition, the agreement establishes a two-tier wage system—the first ever in a national UAW contract—that will drastically reduce wages and benefits for the next generation of auto workers.
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