GM Pensions
This year, in bargaining for a new UAW-GM National Agreement, GM again approached us seeking further reductions in your retiree medical benefits. We have spent several months in difficult and complex bargaining with GM on this subject. From the beginning we refused GM’s demands for benefit reductions. GM argued they have the right to reduce or eliminate retiree medical benefits, as they have done with thousands of their salaried retirees. That issue could have been fought in the courts once the 2005 settlement expired in 2011. If GM prevailed in their argument, they would have the legal right to modify or even terminate your medical benefits. Needless to say, we argued strenuously that GM does not have the right to modify your benefits, even after the expiration of an existing labor agreement. While we feel confident of that position, going to court always involves risk. We wanted to avoid the uncertainty that would be created had we been forced to rely on the courts to resolve the matter. In addition, while we believe that GM is both legally and morally obligated to pay retiree medical benefits, the company’s obligation is largely unfunded. Continued benefits depend on GM’s financial health. If GM were to file for bankruptcy, retiree medical benefits could be cut or eliminated entirely. Unlike pension benefits, there is no required funding – and no government backstop – to protect retiree medical benefits. We have seen thousands of retirees at other companies lose their retiree medical benefits completely when the employer that promised to pay them sought “protection” in the bankruptcy courts. We do not ever want to see UAW GM retirees in that position.