Two Questions About the GM Strike Settlement

The news of the proposed GM Strike settlement leaves me with two questions, one political, one legal, both about the part of the deal in which GM sheds its long-term obligation to provide health care for retired workers.

The political question is whether GM getting off the hook for long-term care will reduce its political will for national health insurance. Only the intervention of the big corporations will provide the sort of political coalition that makes a worthwhile reform possible — and until now it looked as if we were on track to get it due to the ever-increasing costs being shouldered by big firms. Will their remaining obligations for their existing workers suffice to motivate the GMs of the world? I hope so.

The legal question stems from ignorance due to the fact that I never took labor law. Ordinary labor contracts are between worker and employer. Collective bargaining agreements introduce the the union as bargaining agent for the workers. When there are 'givebacks' as in the current deal, workers get a new contract in consideration for whatever the union gives away. But existing (as opposed to future) retirees are in a different position. The firm's obligation to them to provide retirement benefits has matured, has vested, and they are not getting much in exchange — unless one has reason to believe that the new entity being created has a better chance of long-term solvency than GM (could that possibly be true? I'm pretty dubious.). So my no doubt very basic legal question is, why are the retired GM workers bound by this agreement? Are they in the bargaining unit forever? And, secondarily, what happens in so-called “right-to-work” states: If there are nonunion workers, are they in or out of this deal? Wouldn't it be ironic if the very right-to-work laws that firms championed for so long as a union-busting device were to turn out to be a shield against corporate attempts to shed liabilities to former workers that those firms had voluntarily undertaken but now wish to abandon.

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6 Responses to Two Questions About the GM Strike Settlement

  1. Dave says:

    I could support some form of a national health insurance program IF there was a real incentive (i.e. lower cost) for people to stay in shape. I don’t mind subsidizing those with less than me, but don’t want to subsidize those who are lazier than me. i.e. I exercise, eat well, and am generally in excellent health and I don’t want to pay for three or four triple bypasses or 30-40 years of cholesterol and heart medication for a person who eats junk and doesn’t exercise.

    Of course there will be exceptions like the person who was born with some sort of disability or genetic defect, but let’s face it, the reality is that most health problems are due to people’s choices (smoking, obesity, alcohol) and apparently their own health isn’t enough incentive for them to change their ways, so maybe a financial incentive would do it.

  2. DaveL says:

    Retiree medical benefits generally don’t vest.

  3. Mojo says:

    Dave; Where did you find private health insurance that doesn’t accept people who eat junk food but accepts those with preexisting medical conditions?

  4. Dave says:

    I wasn’t talking about private health insurance. I was talking about a national health insurance program and if something like that ever gets implemented.

  5. swmbo says:

    Dave, I think what Mojo meant was that you are subsidizing the health care of people who eat junk food, etc., because their costs factor into your premiums.

    And BTW, as someone who’s long fought chronic health problems, I’d suggest that the statement “most health problems are due to people’s choices” is at best an exaggeration.

  6. Doug says:

    You seem stuck on personal lifstyle choices such as obesety or smoking that cause health care problems, but where does it end. If you hurt yourself playing racketball or tennis should the rest of us have to eat your health care costs.

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