United Auto Workers president Ron Gettelfinger said Tuesday, October 7, that he hasn’t been approached by the Detroit Three to allow additional delays in funding payments to the union’s voluntary employee beneficiary associations.
Gettelfinger said in Detroit that the UAW would do nothing to risk the integrity of the funds, promised by the union chief to last at least 80 years. The funds, which are to cover future UAW retiree health care costs, were established as a key part of the UAW’s 2007 national contracts with General Motors, Ford Motor Co. and Chrysler.
The union already has done enough to help the automakers, Gettelfinger said.
This summer, the UAW agreed to let GM delay paying about $1.7 billion to the funds owed for 2008 and 2009. The deferral recognized GM’s cash burn of about $1 billion a month. GM posted a net loss of about $15.5 billion in the second quarter, which ended June 30.
All told, GM, Ford and Chrysler are removing about $100 billion in UAW retiree health care liability for about 56 cents on the dollar. GM’s portion of the payout to the UAW trusts is about $26.5 billion.
Gettelfinger also said that any federal money from the recently enacted $25 billion automaker loan package should be invested only in the U.S. Although the rules haven’t been written clarifying that issue, Gettelfinger said automakers were obligated to use U.S. taxpayer money in this country rather than abroad.
Gettelfinger commented on the funds after an introduction of new UAW advertisements promoting Democrat Barack Obama for president. The ads will run throughout the Midwest on TV, radio and the Internet. The cost: $3 million.