DETROIT --The UAW leadership has unanimously endorsed a tentative agreement designed to save General Motors $15 billion in retiree health care costs.
The agreement, announced by GM on Monday, Oct. 17, would save the automaker 25 percent of its hourly health care costs.
At a news conference Thursday, UAW President Ron Gettelfinger said that an in-depth analysis of the financial difficulties facing GM convinced the union's leadership that it needed to take action. The agreement still must be ratified by the UAW rank and file.
Gettelfinger, who met with UAW local leaders Thursday to give them details, would not say when that vote might be. He also said the deal was "subject to acceptable resolution of outstanding issues." Gettelfinger declined to elaborate.
The agreement now means that most GM retirees will no longer receive their health care for free. The agreement obligates most retired GM workers to pay a maximum of $752 a year for family health care. That excludes retirees or spouses of deceased retirees receiving a pension of less than $8,000 a year; they still will get basic health care for free.
Active workers will forgo $1 an hour in future pay increases. That money will be funneled into an independently administered trust fund called the Voluntary Employee Benefit Association. The fund will help offset what retirees are losing in health care coverage.
Richard Shoemaker, UAW vice president for GM, described the plan as a "combination of defined benefits and defined contributions."
The agreement remains in effect until 2007, when GM's contract with the union comes up for renegotiation.
"UAW-GM active workers and retirees have long enjoyed some of the best health care coverage of any industrial workers in America," Gettelfinger said. "They will continue to do so under the terms of the tentative agreement."
Gettelfinger declined to say whether the UAW would make similar deals with Ford Motor Co. and the Chrysler group.
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