Thursday, October 20, 2005, a meeting was held in Detroit regarding proposed changes to health care benefits.  The assembly was addressed by UAW International Vice President Dick Shoemaker, with full support offered by past International Presidents – Doug Frasier and Owen Bieber. 

VP Dick Shoemaker

Much discussion has been held on this issue since June, with 99% resolved.  We are all feeling the impact since Bush has been in office.  Something must be done with national health care. 

This has been a very difficult year for GM.  We thought GM would be able to announce better news for their 3^rd quarter earnings.  We’ve been through tough times before, but today’s situation is different than any other due to global economy overall.  GM’s market share is declining even as auto sales are rising.  This is not our fault, but never-the-less, we are impacted. 

First quarter losses were $1.3 billion, second quarter was $318 million, and third quarter was $1.6 billion.  Their credit rating is junk status.  The October share of market was 22%.  The declining market share is the problem; not health care!  When there are 17 million vehicles sold and they lose 1% of market share – that is a loss of 170,000 vehicles produced and  equals the loss of an assembly plant.

The Financial Accounting Standard Board (FASB, 106 or OPEB), which regulates corporate financial statements and has been in effect since 1992 for GM, recorded 1992 costs at $38.4 billion (a one time charge), and today they carry a liability of $77 billion. 

The OPEB (Other Post Employment Benefits other than pension) recorded drug liability at $27 billion and medical at $30 billion, for a total of $57 billion being spent on healthcare. 

The defined benefit’s is changing and contribution funding is projected to be sufficient for 20 years.  The agreement still needs to be voted on by rank and file members and would last until 2011, with either party being able to pull out if not satisfied.  Target date as of now is set for April 1, 2006, with a few things left to wrap up with HMO.

PROPOSED CHANGES FOR RETIREES

The initial deductible was $300 per person and $600 per family, but with the following contributions made by the EBA, (the Voluntary Employee Benefit Association created by GM and the UAW), the amount is reduced to $150 per person and $300 per family.  Out-of-pocket payments would be capped at $370 for individuals and $752 for families.

·        Low income and retiree’s and surviving spouses who earn less than $8000 annually or $33.33 from their pension will not be affected by changes.  (There are 74,000 in this group that would not have to pay.)

·        Monthly Premium:  Single retirees or widowed spouses would pay $10 a month; families, $21.

·        A maximum of a $50 emergency room co-payment, (which is waived if admitted).

Costs                                       Single               Family

Annual Contribution:                          $120                $252

Deductible:                              $150                $300

Maximum Coinsurance            $100                $200

                                                $370                             $752

CHANGES FOR ACTIVE WORKERS

·        Employees would forgo $1 an hour, which is made up from future cost-of-living increases and a wage increase.  Defined contribution VEBA:

March 2006                                   .06 cent cola

June of 2006                                  .06 cent cola

September 2006                            .05 cent cola

General Wage Increase (Sept 06) .83 cents

                                            Equals  $1.00

CHANGES FOR ACTIVE AND RETIRED

·        Prescription drug co-pays for everyone would change from $5 to $10.  Retail would be $5 for generic, $10 for brand, and $15 for E.D.  Mail order would be $10 for generic, $15 for brand, and $18 for E.D.

Barb Henderson                      Louie Schreuder

President                                 Chairman