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Kai Ryssdal: It’s being called a tentative agreement. Members aren’t going to vote on it until Wednesday. But it looks like Chrysler and the United Auto Workers have struck a deal that should pad the carmaker’s balance sheet with more government cash.
It would also mean Chrysler can pay less into a new health fund for retirees. Workers at General Motors and Ford are going to be watching closely. Because auto workers’ benefits have been the envy of the American labor force for years. We asked Ashley Milne-Tyte to explain how benefits at Chrysler and General Motors might appear after the negotiating is all said and done.
ASHLEY MILNE-TYTE: Health-care benefits are the jewel in the crown of auto workers’ retirement plans. Harley Shaiken is an expert in labor studies at University of California, Berkeley. He says traditionally auto workers have been guaranteed health benefits.
HARLEY SHAIKEN: In full, until your death. There were of course some co-pays but by and large the company took care of your retirement and your health care once you left active employment after three decades in the industry.
He says health-care benefits will probably suffer in Chrysler’s agreement with the UAW. Edward Lapham is executive editor at “Automotive News.” He says the White House wants to see workers protected in their retirement.
EDWARD LAPHAM: Actually the benefits probably won’t be radically reduced. The UAW of course was a big supporter of the president in the last election.
After this year none of the big three will be directly responsible for paying retiree health-care benefits. They’ll be paid by a trust administered by the union. Chrysler contributed $9 billion to the trust. But Harley Shaiken says under this new agreement with the UAW…
SHAIKEN: Half of the $9 billion that Chrysler committed in 2007 will now be funded in Chrysler stock. And with a bankruptcy proceeding on top of that, there are a lot of question marks.
If Chrysler recovers and its stock does well, that’ll boost the amount of money in the fund. But if the stock collapses or is wiped out in bankruptcy the fund could be $4.5 billion poorer. And retirees could find that jewel in the crown is worth far less than they thought.
I’m Ashley Milne-Tyte for Marketplace.