UAW agrees to help fund Grand Bargain

UAW agrees to help fund Grand Bargain

The United Auto Workers union agreed “to help raise material contributions toward the health care costs for Detroit’s retirees” as part of the Detroit bankruptcy’s “Grand Bargain,” the court mediators announced today. But the union will not use any of its own funds, according to the statement, and as with a similar announcement from the Michigan Building and Construction Trades Council  on Monday, no dollar figures were released.

Last month,  House Speaker Jase Bolger (R-Marshall) called for unions to contribute to the “grand bargain”, the arrangement to provide funding for Detroit pensions and protect the Detroit Institute of Arts collection from sale. The UAW announcement came just two hours after bills providing for a one-time $197 million payment from the state toward pensions funds moved to the full House with committee approval.

The state money would be pooled with $100 million raised by the museum and $366 million from foundations. The deal also hinges on Detroit’s pensioners approving the city’s Plan of Adjustment during the 8-week voting period that is currently underway.

Here’s how the Detroit Free Press analyzed what the UAW’s commitment to help with health care costs means:

While the city’s workforce — current and retired — faced heavy pension cuts initially, the cuts have been reduced significantly in negotiations over the largest municipal bankruptcy in American history. But health care cuts have not, with Detroit ending city-paid health care and offering stipends of $175 a month or up to $400 a month for duty-disabled workers to buy insurance on their own. The switch reflected a 90% cut in health benefits, and many retirees say that their modest pensions leave no room for added co-pays, deductibles and other out-of-pocket medical expenses no longer covered. In addition, many city workers have received pay cuts over the past few years, some by way of mandatory furloughs.

 

UAW Contribution-Mediator’s Statement