(First) Union Agrees to Fund “Grand Bargain”

(First) Union Agrees to Fund “Grand Bargain”

The Michigan Building and Construction Trades Council  will contribute money toward the “grand bargain,” federal court mediators announced late Monday. The Council, a statewide coalition of dozens of trade unions, becomes the first labor group to commit cash toward funding Detroit’s pensioners as House Speaker Jase Bolger (R-Marshall) called for last month.

The Council, organized into nine districts covering Michigan, is a coalition of building and construction trade unions. The Greater Detroit Region lists more than two dozen member unions ranging from Asbestos Abatement Workers to Teamsters.

The mediators’ statement did not include a dollar figure but said the Council would make “material contributions toward health care costs for Detroit’s Retirees.” When the city filed for bankruptcy last year, its obligations for post-employment health care and other benefits were estimated at $5.7 billion to $6.4 billion. The city’s current Plan of Adjustment and agreements with some employee and retiree groups includes moving health care administration to Voluntary Employee Benefit Associations.

The mediators said “it is hoped that other labor organizations will soon come to the table ad support this effort to assist Detroit’s retirees in meeting their health care costs.”

Bolger, who released a statement shortly after the mediators, also did not offer any details of the Council’s contribution or other terms of the support. “Detroit’s recovery will require all hands on deck, and I am grateful to see these union organizations stepping forward to take a seat at the table,” he said. “This leadership is important as the full picture of the plan for Detroit’s success continues to comes into focus.”

The special House Committee on Detroit’s Recovery and Michigan’s Future is having a fourth day of hearings May 20 that is to include Mayor Mike Duggan’s testimony on a package of 11 bills to provide the state’s  share of the “grand bargain.” A dozen philanthropic groups have pledged $350 million toward the plan while the Detroit Institute of Arts has agreed to raise $100 million. In order for the city to receive the $816 million from the grand bargain, retirees must approve the city’s Plan of Adjustment during voting over the next seven weeks.

Here is the federal mediators’ statement: