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GM Bankruptcy Plan Includes UAW Lobbying Organization for Health Care Reform

Protection is asked for funding for what will largely be a taxpayer-financed organization that includes Chrysler and Ford.

by on Jun.08, 2009

While the union preserved active woker benefits for the moment at GM, retirees took a a bit hit. Mor ecuts could be on the way.

While the union preserved active worker benefits for the moment at GM, retirees took a a big hit. More health care cuts could be on the way.

The United Auto Workers Union in its revised contract with bankrupt General Motors is attempting to establish a lobbying organization funded by the automaker that would push for health care reform. Ford Motor Company and New Chrysler would contribute as well.

GM has agreed to provide funding of $3 million annually for five years to a “National Institute for Health Care Reform,” provided that Ford and Chrysler participate with proportionate funding.

GM CEO Fritz Henderson told TDB that, “We are committed to go ahead with the Institute,” even though he didn’t know the status of Ford and Chrysler contributions. “There has to be change in the health care system,” Henderson said.  Henderson disagreed with our lobbying designation, insisting  that the Institute is a research group.

The Institute  funding, of course, will be largely taxpayer supplied since the U.S. Treasury will hold majority stakes in GM and the Chrysler Group when they emerge from bankruptcy.

The new push comes at a time when the national debate on health care is heating up, as President Obama tries to fulfill his campaign promise to reform a system that spends more money and produces worse results when compared to any other industrialized nation. We are now facing skyrocketing costs, massive numbers of uninsured people and the ongoing problem of profit-driven decision-making on the delivery of health care.

Almost 47 million Americans are without health insurance, and the cost of providing medical services from a private, for-profit system is rising at an unsustainable rate. This  is forcing businesses to increasingly trim or eliminate benefits for workers with health care — precisely what is happening at the auto companies.

The revived union initiative is taking on new urgency since the UAW has now assumed enormous risks on behalf of its one million retirees and dependents whose health care will be financed by Voluntary Employee Beneficiary Associations (VEBA) run by the union, funded in part by automaker stock.   (more…)