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UAW contract almost up

Alisa Roth Sep 14, 2007
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UAW contract almost up

Alisa Roth Sep 14, 2007
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Scott Jagow: The contract between the big three car makers and the United Auto Workers expires tonight at midnight. The UAW has chosen GM as the lead company in the talks. That means the union might strike GM if no deal gets done.

The UAW usually negotiates with the lead company and reaches a similar agreement with the other two. Alisa Roth tells us what’s at stake here.


Alisa Roth: Right now, the Big Three pay about $10 billion a year in health care benefits. That price could rise as workers and retirees get older and health care gets more expensive.

Erich Merkle is a consultant who works with the auto industry:

Erich Merkle: Quite honestly, there’s gonna have to be some sort of creative solution involved.

The most likely fix is a Voluntary Employee Benefit Association, or VEBA. It’s a kind of trust fund to pay for those health benefits. It would let the car makers take a big liability off their books, and protect workers’ health benefits if the employer were to go out of business.

Merkle says negotiating such a deal is complicated:

Merkle: It all depends on the terms and conditions by which the trust fund is set up, such as the amount of money that’s placed in the trust fund.

And whether the UAW can ask the car makers for more money later.

There are other issues on the table as well. Possible plant closures, for one. The talks will probably go past the deadline, but nobody expects a strike.

In New York, I’m Alisa Roth for Marketplace.

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