As LaRouche PAC Reported, `Big Three' Will Dump Their Healthcare Plans on the Union

June 1, 2007 (LPAC)--Ford, GM, and Cerberus-owned Chrysler will demand this Summer that the United Autoworkers Union (UAW) take the healthcare plans of retired autoworkers off the auto companies' hands, in order to save each of the companies billions in healthcare liabilities. This huge union "giveback," of which LPAC warned in a May 18 report on the Cerberus buyout of Chrysler, was reported in the May 29 Christian Science Monitor. The Monitor interviewed two union benefits experts who confirmed that the automakers will demand the union take lump-sum payments from each of the `Big Three,' and then administer its own retirees' healthcare plan as a voluntary employees beneficiary association (VEBA), rather than a full-scale retiree health plan.

The lump-sum payments would probably only cover 60-70% of the liabilities of the current healthcare plans. This is sometimes called the "Goodyear solution" for the auto companies, because Goodyear Tire and Rubber got the United Steelworkers Union (USWA) to accept a $1 billion lump payment and take over its healthcare plans in 2006.