Take the stock, Ron
Word from the negotiations in Detroit has the UAW and General Motors arguing over how much the company will contribute to the union in exchange for taking the health care obligations of old GM workers off the company’s hands. Called a VEBA, i.e., voluntary employee health association, the idea is that the company dumps a lump sum on the union, the union invests the money and pays the health care benefits out of the proceeds. GM gets off the hook for paying for the health care of people that have retired, and the union resuscitates the company upon which its current workers are dependent.
What has received very little attention is a small clause which GM and the union have both agreed upon, a clause which explains a whole lot.
The union and the company agree that, should a national health insurance plan be adopted, the union gives back the money. The union would prefer to have the fund guaranteed by the federal government than by GM. So, both the company and the union will be voting for Hillary. If she is elected and can ram through a national health care system, the so-called “single-payer” system modeled on Canada’s health care plan, GM gets between $50 and $65 billion dollars back.
But there’s a better deal for the union than betting that Hillary gets elected and can ram socialized medicine through Congress. That’s been a plan for certain Democrats since Truman proposed it, and it hasn’t yet happened. People seem even less willing to buy into that concept than they were to buy a Pontiac Aztek.
Here’s a better idea. (No apology to Ford – they’re not using the slogan anymore.)
The UAW should not take cash for the VEBA.
It should take GM stock.
This is a deal for both GM and the union.
The union’s basic problem is not health care, benefits, hourly wages, or any of that mundane stuff that union leaders have worried about for a century.
The union’s basic problem is insuring GM’s survival. No GM, no wages. No benefits. No nothing.
But the union doesn’t manage the company. The management of the company currently is the exact same group of people who ran it into the ground before they decided they ought to stop running it into the ground. Not running the company into the ground is called “restructuring.” In GM’s parlance, “restructuring” means keeping unimaginative and incompetent management in place while cutting union jobs and benefits on the ground that labor costs are excessive compared to foreign nameplate companies that have sentient human beings in their management.
There is no way the UAW comes out the winner in the current negotiations unless it gets some control over the management of the company upon which it depends. If the company wants the union to sacrifice to bail it out, then the company needs to be giving the union a say in what the company does in the future.
Unfortunately for the people that work for the company, Ron Gettelfinger and Rick Wagoner are twins from different wombs: neither one of them trusts the typical GM worker and neither believes in the company that employs them. Both are short-horizon people who want to get the most before the collapse. Gettelfinger wants to keep jobs in the U.S. as long as possible before they all go to China. Wagoner want them to go to China a.s.a.p.
What’s lost is the talent of the people in Pontiac, Janesville, Bowling Green, Detroit and all of the other places that make General Motors cars, that design those cars, and that are the future of the company.
Whether it is the corporation or the union, the accountants are running the show.
Neither the union nor the management at General Motors has the slightest idea of what the company could become.
So, Gettelfinger will sell out the union’s members.
Were he half the intellect he thinks he is, he’d be insisting that GM fund that VEBA with stock, so that the union would have an effective say in the management of the company upon which its members depend. Were Wagoner not a toad, he would want to trade stock for the VEBA, so that the company would have an extra $50 to $65 billion to invest in new product around the world.
But that won’t happen, because both the union and the company are managed by men with no vision.