UAW Launches Lawsuit Against GM Over Healthcare Retiree Costs
By William Finch on April 10, 2010, 7:00 am Posted in Business NewsGeneral Motors recently emerged from its own bankruptcy. The American car manufacturer was nearly taken over by the government as a result of the recent government bailout. The company just came out of bankruptcy proceedings. Even though the GM company has not yet become solvent financially, the United Auto Workers Union has filed a lawsuit against the automaker. The UAW claims that GM owes a Union owned healthcare fund $450 million dollars.
Origins Of The Suit
Delphi Corporation, a supplier to General Motors, declared bankruptcy in 2006. The company emerged from bankruptcy protection in 2007, but could not afford to pay the money it owed to the United Auto Workers health fun. The General Motors corporation agreed to pay the funds to the UAW retiree health insurance fund as part of a settlement agreement.
When General Motors declared bankruptcy, the $450 million dollars went unpaid to the UAW. The union believes that the original agreement is still in effect, even though General Motors was forced to reorganize after it declared bankruptcy in 2009. UAW demanded a the amount from the automaker in late October of last year. Lawyers for the United Auto Workers filed the suit in a federal court this Tuesday.
Points Of Contention Between GM And UAW
The UAW believes the original agreement should still be in effect, despite the financial problems that the General Motors company has faced. GM sent back a letter rejecting the union’s demand. The federal court will determine whether or not the agreement remains in effect. It is unknown if the retiree health care benefits have suffered because of the lack of available funds. Even if General Motors loses the case, the company may not be in a position where it can afford to pay $450 million to the United Auto Worker’s Union.
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Delphi spun off in 1999. They filed Chapter 11 in Oct ’05. They emerged Oct ’09. 19 years I worked for GM and 10 years as Delphi. For 30 years I expected to retire in May of 2010 with a pension and healthcare represented as part of your compensation. (No recieved raises after Oct ’05 to the present.) During the 4 year Chapter 11 the company went from 180,000 employees to 100,000 employees. 151 companies including Delphi have turned their pensions over to the PBGC. Government for the people by the people? Not at all! Government for the corporations seems more the case to this American. I now also understand the BOOM in Baby Boomers. We lost in the 90′s dot com stock craze and now in the autunm of our years as well. Has anyone published figures on how much employees have lost on their companies stocks? And what’s up with foriegn investments being protected in Chapter 11. Didn’t that money come from the investors. America we need you now we can’t fight alone against the MONSTER!