The Constitutional Death of the UAW “Part Four” by William Hanline

Cycle Repeats Itself

Have you heard of the “Cyclic Theory” in history? Some historians claim history eventually repeats itself. I find an irony in that theory; for as intelligent human beings wouldn’t you think we would learn from recorded history not to repeat the same mistakes? After reviewing court documents about the UAW/GM lawsuit, newspaper articles, even a UAW booklet printed and passed out to Big Three/ UAW retirees back in 1976, it is apparent corporate America has reinvented the old problem they experienced before. The problem or burden of legacy cost for retirees and their healthcare on American corporations.

In 1973 when the union negotiated language for thirty and out in Big Three contracts the UAW set the trend in organized industrial America that would allow workers to retire before reaching age 65. UAW President, Leonard Woodcock presented a booklet to UAW members in 1976. It explained how the union was able to negotiate improvements in retirees’ benefits. Yes, improvements even though the Big Three suffered huge losses from high gasoline prices, and poor sales of gas guzzling cars they were building at that time. Additionally, the booklet reported the effects inflation had on retirees’ healthcare and economics in general, not the automakers but the retirees! Furthermore, lest not forget, Chrysler’s request for a bail out from congress. Even though the UAW negotiated a six year reprieve from negotiating any more thirty and out language the union was still able to live up to its Constitutional commitment to fight for economic and social justice for its members, retirees and communities. In fact, Woodcock wrote in the forward of that booklet. “We cannot be committed to a mandated course which could embroil us in litigation.” Funny thing, thirty years later the UAW is joining GM in a non-adversarial lawsuit that could prevent retirees from going to court against the automaker for reducing their benefits. What is this sudden profligacy exhibited by Gettelfinger and Shoemaker (the Cooperation Partners) toward lifelong benefits for UAW retirees? Especially, since they know the UAW won a motion in U.S. district court on December 27, 2005 that prevents ArvinMeritor Inc. from changing retiree health-care benefits. The purpose of this letter is to explain the wherefores and whys and to encourage every GM retiree to file an objection to the UAW/GM Settlement Agreement before the February 13, 2006 deadline. More importantly, to ask retirees to join with Mr. Leroy H. McKnight’s efforts to protect retirees’ legal rights to post retirement (vested) benefits.

Nature of the Lawsuits

First, do not conflate the UAW/GM lawsuit with Mr. McKnight’s lawsuit for they are two different creatures.

1) The UAW/GM lawsuit arises from General Motor’s decision to unilaterally (with out bargaining with the UAW) to modify retirees’ healthcare benefits. The UAW alleges in the lawsuit that hourly healthcare benefits in retirement are VESTED and unalterable. However, before the lawsuit was filed the UAW and GM negotiated a Memorandum of Understanding (MOU), known as the Settlement Agreement (SA), which was ratified by active working GM-UAW workers. The circuit court judge did not rule on the initial purpose. However, the case changed to get the judge’s rubber stamp of approval of the new Settlement Agreement. The new MOU will cost the retirees’ more for benefits and prevent them from suing GM during the life of the SA.

2) The McKnight lawsuit arises from the method the UAW and GM are using to seek relief for GM from retirees’ healthcare cost. The UAW is literally helping GM accomplish the latter without GM filing bankruptcy. Bankruptcy laws would allow GM to reduce retirees’ benefits without all the procedural safeguards and consequences provide by law. Mr. McKnight is trying to intervene on behalf of all retirees’ rights to receive unaltered benefits and be able to sue GM if the company does reduce the benefits.

The following are various reasons Mr. Mark Baumkel, Mr. McKnight’s counsel, recorded in a brief filed December 27, 2005 in opposition to the December 22, 2005 order reached by Judge Robert E. Cleland to temporarily approve the Settlement Agreement reached by the UAW and GM, until a fairness hearing is held March 6, 2006.

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