Going into the '07 negotiations the UAW was faced with daunting demands from the Detroit auto companies. In the name of remaining competitive in the home market, the domestic producers demanded drastically reduced retiree health care and labor costs. If not, they threatened to unilaterally cut retiree health care entitlements, and to outsource more work to non-union suppliers. The Detroit 3 threatened more plant closings and reminded workers of the recent harrowing experience of former GM workers victimized by the Delphi bankruptcy. The circumstances in 2007 were vastly different from the days that GM alone dominated nearly 50% of the U.S. market and was popularly referred to by its employees as "generous motors." Today the domestic companies combined don't have the market share once enjoyed by GM alone. In these circumstances, shrinkage was inevitable. Whereas the UAW enjoyed the upper hand in past negotiations with a potent strike threat (last exercised during the '98 Flint strikes), that power had radically been shifting to the auto companies by 2007. This was made even worse by the UAW's isolation from the public at large, which could hardly identify with the "generous" autoworker health care benefits or the $27/hr wages paid for "mere" factory jobs.

I am reminded of a slogan that, "when the times get tough, the tough get going." The times were surely tough, but the tough…well, there was no "tough." The tragedy is that – for autoworkers, for the labor movement and the working class as a whole – there could have been. Instead, under the leadership of President Ron Gettelfinger, the union allowed the companies to set the terms of the agreements. The capitalist class was so elated by the outcome that it could not restrain its glee. They showered the UAW's leader with accolades such as "Newsmaker of the Year," "Man of the Year," etc. - a rare sight indeed for a union leader to be so knighted by the captains of industry.

At the conclusion of the extraordinary negotiations that took place with GM in the summer of '05, the UAW had the makings of not one but two strategies going forward – the one selected, and the one left to wither on the vine. It was in '05 that GM got agreement from the UAW to embark on a VEBA – a very modest one – to pave the way for the cataclysmic transformation ratified by active workers in 2007. President Gettelfinger made clear in a recent interview on Detroit's Channel 7 that the union embarked on the road to the '07 VEBA back then, while the ink was still drying on the '05 concessions.

At the start of the '07 negotiations at the UAW-GM joint activities center, President Gettelfinger was photographed with a group of GM retirees and staffers holding a sign saying "We Need National Health Care." While this would suggest that the UAW was going to press GM to live up to the commitments of the '05 Attachment E (why else parade with that sign at that place at that moment?), nothing was further from the truth. Already by then the wheels were in motion for the comprehensive VEBA, "Attachment E" be damned.

As alarmed as I was about what was negotiated, I was even more aghast at the process leading up to the negotiations – which everyone agreed was probably

3 The design of the "Contract Report" inadvertently or otherwise gave the appearance that the details of the VEBA were of interest only to retirees, although it was the active workers who would be voting on it. The only place where the VEBA was explained was in a dense 2 page letter made part of the report but addressed as "A MESSAGE TO UAW GM RETIREES." I suspect that many current workers skipped that section. Compare this handling of the VEBA with the Report's explanation of changes made to retiree pensions, which is addressed to both "Current," and "Future Employees" together. The bullet referencing the VEBA on the Report's front page highlights the billions that GM would spend on it, period.

4 According to President Gettelfinger, the two day strike was merely "recessed." Asked what would happen if the tentative contract was rejected, he said workers would be back on strike.

The UAW has all the appearances of a democratic union and no doubt it is more democratic in form than many other unions. What I know from my own experience in the GM section of the union is that the leadership has honed this "appearance" into a fine art. So, for example, the UAW goes through a very deliberate exercise in every negotiations of soliciting rank and file resolutions which are supposed to be voted on at local union meetings, presented at the divisional subcouncils for another vote, and then culled and adopted as part of

the "2007 Proposed Contract Resolutions" book that is then presented to the corporation.

The lead paragraph of the section of the "Contract Resolutions" book dealing with Health Care criticizes the Corporation's "intransigence…toward fixing the health care cost problem on a comprehensive, national basis (my emphasis)." The statement goes on to say, "We will not allow the Corporation to shift the failure of the health care system onto the backs of our members."

Apparently unwilling to challenge GM's "intransigence" on something that had already been agreed to in 2005 (i.e., Attachment E), the UAW leadership did exactly what they said they wouldn't do. True, they did not agree to shift any of the rising inflationary health care costs onto the retirees. They kept the amended 2003 agreement on retiree health care intact – that is, until 2010, when the VEBA kicks in. When that happens, the entire risk of covering the costs of UAW retirees' health care falls on the union and, of course, the retirees. The Corporation did indeed "shift the failure of the health care system" onto the backs of the retirees – in one, big, lot. It was the wholesale version of converting from a defined benefit plan to a defined contribution – for years resisted by the union. Now it's up to the UAW-hired and directed body of investors to keep the VEBA on par with the inflationary costs of US health care. The bets in some sectors of the financial community are that it won't happen, so they are already talking about how the UAW is going to have to change the life styles and/or pare down the benefits of the retirees to bring costs down.

Many sincere UAW members, officers and staff believe that it was the best we could do, under the circumstances. Maybe so, but I am disturbed by the fact that - not only was the VEBA kept in the back room until the very last minute - it was also misrepresented when it was revealed to GM workers. The core selling point for the VEBA was the severance of retiree health care from the

The pursuit of a government-paid health care system for all, as a follow up to the agreement reached in 2005, would have taken the UAW in a different direction, requiring imagination, grass roots member education and involvement, coalition building and a relentless campaign in the media putting GM on the spot. While the UAW now is pitching an ad campaign assuring viewers that the UAW works for the community, it would have given that pitch real meat had the UAW built a two year campaign and pressed GM to live up to what it agreed to. GM would have no leg to stand on for refusing the union's win-win proposal that would both lift the burden of health care costs off GM's books and simultaneously cover not only GM members but 47+ million uninsured as well. With a national network of universal health care proponents on its side and the availability of the strike weapon in this context, the UAW may have forced GM to break with the insurance and pharmaceutical industries. Such a split in the ranks of the corporate elite is a necessary condition, I believe, to the successful struggle for national health care. Were the UAW to have succeeded with GM and gotten serious resources behind their joint lobbying efforts, the parties could have in the meantime negotiated an interim solution as the pressure built on the Congress to enact new legislation. –This approach could have saved GM's outlay for the VEBA, reducing the imperative for a two-tier wage structure inside UAW-GM plants.

No doubt there would be many skeptics about such an approach, but I only need remind them that there were many skeptics back in the '30s about the likelihood that autoworkers would be able to bring GM - the largest corporation in the world with a reputation for virulent anti-unionism - to its knees and force it to recognize the UAW as their bargaining agent. In any event, why get the letter of agreement in Attachment E if it wasn't worth pursing?

It should be noted that Attachment E was reinstated intact in the new agreement. Alongside it is a new agreement to set up a "National Institute for Health Care Reform" which makes reference to only piecemeal changes in the current – privately managed - system. While GM agreed to fund such an operation with $9 million, no money was specifically allocated to the implementation of Attachment E.

Now, of course, there's been a lot of discussion since the agreement was ratified about the issues I've raised here. It smacks of "shoot now, ask questions later." This culture that permeates the UAW is flawed, designed to make it easy for the leadership to get its way but not necessarily to get the rank and file what it needs. The fact that the UAW leadership was unwilling to promote open discussion and debate about such profound changes before sitting down with GM, charts a course of weakness for the union, not strength. It doesn't matter whether the union has all the "democratic" trappings" if union members are kept in the dark and/or discouraged from evaluation alternative approaches; that's no democracy at all.

Having worked on behalf of the UAW's GM Department for eleven years – five as a "Future Product Sourcing Representative," and six on staff as part of the Umpire Section, I know that expressing this contrary viewpoint is considered a forbidden taboo. To paraphrase a comment recently made by presidential candidate John McCain, I love my union enough that I am willing to make some people angry.

International Representative, retired

UAW-GM Department

former President & Chairman

UAW Local 909, Warren, MI

January 28, 2008

A prominent theme throughout the parties' current discussions ha been the unsustainable

trend of rising health care costs. The resulting economic burden has not only impaired

the Corporation's competitiveness and employees' job security but also has imperiled

workers, families and communities throughout the country.

Over the years, the parties have worked together to improve various aspects of the health

care system, including accreditation standards for Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs), clinical quality standards, Certificate of Need policies and Electronic Health Records. Cost trends however continue to rise.

Given the fragmented and wasteful nature of the U.S. health care system, the parties recognize an issue-by-issue approach to reform – while necessary – is no longer sufficient in meeting the needs of purchasers, payers, consumers, and patients. The parties agree that a lasting solution to our health care cost crisis cannot be forged at the bargaining table.

Many developed countries have addressed the health care problem by requiring broad-based financing, cost-effective delivery and simple, universal administration. In Canada, many companies have gained a substantial competitive advantage relative to U.S. labor costs because of such a national health care system. Here at home government must be more aggressive in leveling the playing field so American businesses and workers can be as competitive as possible.

To this end, the parties will engage in an unprecedented effort to enact policies to improve the quality of health care and to make it more affordable, accessible and accountable on a comprehensive, national basis. As examples of such an approach, the parties agree to pursue the following efforts:

proposals that, in whole or part, reinforce risk-pooling, streamline administration, assure access and foster cost-effective, quality health care.

and GM will support public policies at the federal and state level that will enable all Americans to have health insurance.

The parties agree that the stakes are now so high that reforms are needed at the national and state levels. Preconceptions should be discarded and mutual efforts should be pursued in a spirit of pragmatism. The parties recognize that the task is fraught with difficulty and that we may fail. If we do nothing however, failure is guaranteed.

The UAW and GM will form coalitions with other stakeholders, including other employers and unions, senior and consumer groups, hospitals, doctors, insurers, state and local governments and policymakers interested in improving quality and reducing costs. The UAW and GM will encourage support for these national solutions to address health care quality and cost.