United States

Auto Workers Demand National Healthcare

By: Tonyia Young

As jobs continue to leave the United States in alarming numbers, the war in Iraq continues to escalate with no dream of an end, and the oil crisis continues to confront the patience of world citizens, American automotive workers are again confronted with concessions in the latest round of Big Three/UAW negotiations.

The current contract for big three workers expires on Sept 14th, and suggestions have surfaced, citing stalled talks with the UAW regarding a VEBA fund (Voluntary Employee Beneficiary Association), that auto talks may be delayed past the deadline.

The automakers have asked the UAW to help them to remain competitive by establishing a VEBA trust to fund retiree costs, which the UAW would manage for the companies and retirees by investing funds in the marketplace.

Primary issues are “legacy costs,” which could mean additional cuts to both retiree and active healthcare benefits. In exchange the UAW want assurance additional jobs will not be outsourced to foreign countries.

Some, however, doubt such relief by the UAW will be enough to save the struggling auto companies.

University of California, Berkeley Professor, Harry Shaiken, said reducing legacy costs alone won’t put domestic auto makers on equal footing with foreign producers, or serve to restructure the companies.

“I don’t think the workers giving up health benefits or wages is going to get the industry out of its current fix,” he said. “We have to look at this in the larger context.”

He also explained better automotive designs, improved strategic decisions, as well as federal public policies concerning national healthcare and trade policies are necessary to allow the automakers equal footing with their foreign counterparts.

A VEBA fund would mean a one time contribution from the automakers at a proposed rate of 60 cents on the dollar.

The automakers have also proposed contributions should take place over time or be funded with company stock, which many consider a huge risk for union members, who would be forced to rely on the UAW’s strategic investments to make the fund viable. The union would also become the healthcare provider to over 500,000 retired UAW members.

Former UAW Executive Board Member, and Co-Founder of the Center of Labor Renewal, Jerry Tucker explained the union would be required to take responsibility for the trust remaining solvent through responsible investment decisions, equating to inflation in the healthcare fund.

“Why aren’t we hearing more of a drumbeat from the unions for this whole argument to be countered very quickly by saying no, here’s the way we’re going down,” he said. “We’re going down to Washington together and we’re going to push the enactment of a universal, comprehensive, single payer healthcare plan.”

Two glaring examples of dangers surrounding VEBA trusts are Caterpillar and Detroit Diesel workers who filed federal law suits earlier this year, demanding restitution for thousands of workers, now strapped with huge healthcare expenses resulting from bankrupt VEBA trusts.

Tucker isn’t the only one questioning the validity of a VEBA plan.

Soldiers of Solidarity and Future of the Union suggest voting no to any proposal which includes a VEBA trust and suggest union members look for red flags in upcoming contract proposals. They encourage a grassroots labor movement toward single-payer national healthcare.

They claim the auto crisis is a result of a larger national crisis, affecting all U.S. workers, and say unions should be leading the way in supporting national healthcare by saying no to the automakers demands.

GM active and retired workers took concessions last year, after GM and the UAW reopened the contract for concessionary giveaways midway though the contract.

“It’s easier to take a stand now, before VEBA comes to pass, than to try and address it after we’re already there,” said Allison Transmission worker, Theresa Barber, proactive in instructing fellow workers to vote no on a concessionary contract.

She is also a website administrator of, an activism site comprised of factory workers and concerned citizens across the U.S. unhappy with current concessionary trends and loss of jobs. The site strongly encourages support toward a national healthcare policy, and suggests forming local coalitions to stop the attack against the working class.

“I know where we’ve been and I can see where they are trying to take us, and it isn’t good,” she said. “If somebody doesn’t start standing up, we all lose.”

National healthcare may indeed be the solution for automakers and autoworkers when considering the Department of Labor statistic of 47 million Americans without health insurance. Recent national Gallop polls suggest the American public consider healthcare a top priority.

Health organizations are pushing for legislation to adequately address the growing disparity of Americans without healthcare.

Health Now, a growing group of interested medical professionals and interested citizens, who say now is the time for a single payer national healthcare policy, [noting that] 80 percent of people without insurance are gainfully employed, but are lacking adequate coverage.

They are concerned with the elderly, the ill, and number of developing children, young men and women without preventative care, and call for a federal policy to address the national healthcare crisis. They support Bill H.R. 676, gaining growing support from legislators, health professionals, and the labor movement.

Language within the bill could potentially save the nation approximately 286 billion per year, or 1.1 trillion over the next 15 years. Employer costs would be reduced to less than $100 per month. Union members claim such a bill would save automakers substantially more than a VEBA trust.

AFL-CIO Legislation Director Bill Samuel agreed in a recent Washington Journal segment, when he said two thirds of American workers once obtained health insurance through their employers, with an increasing number of American workers now without health insurance.

“President Bush calls this an ownership society, but it is an on your own society,” Samuel said. “The trends are very troubling.”

He also explained the U.S. has incurred a decline in wages for three consecutive years, and said U.S. workers are in a race to the bottom in terms of trade, wages, healthcare and pensions.

“I don’t think anyone wants to see the answer to America’s problems being lower wages and lower benefits as a way of competing around the globe.”

But automakers are pushing for just that, and concessionary trends have been set in recent years in auto supplier contracts, including the recent showdown with Delphi Corporation, whose employees were forced into huge wage and benefit concessions.

Automakers have suggested that if they don’t get a VEBA plan active workers may have to incur wage and benefit concessions to compensate for company healthcare expenditures, but questions remain regarding whether worker concessions are viable long-term solutions.

This is not the way we should go forward in America,” Tucker said. “The UAW, as a one time precedent setting union with a social responsibility history, should be in the forefront of making this [national healthcare] demand.”

September 14th may not only signal the expiration of auto workers’ contracts. Growing discontent regarding health benefits could spark the resurgence of a social movement toward U.S. healthcare and worker rights.