The UAW's Choking Health Care Burden
The automakers have proposed establishing "voluntary employee benefit associations,'' or VEBAs, to fund retiree benefits.
Automakers might contribute as much as $80 billion to the funds, which would be run by the UAW. The union would invest the money to ensure it had enough money to meet retiree health care obligations.
VEBAs would take the choking obligation to fund retiree benefits off automakers' books, which could help improve their competitiveness.
MP: What company could possibly be competitive and survive when it is obligated to pay health care benefits for 5 workers per employee, one who is currently working, and 4 additional workers who are retired? Ford, GM and Chrysler are paying health care benefits for 900,000 workers, but only 180,000 are actually current workers! Is it any surprise that the Big Three have asked the UAW to take over the obligation for unlimited lifetime health care benefits for its members?