The New Treaty of Detroit: Are VEBAs Labor's Way Forward?

doi:10.1017/CBO9780511809798.008

7 - The New Treaty of Detroit: Are VEBAs Labor's Way Forward?

Published online by Cambridge University Press: 05 June 2012

Teresa Ghilarducci

Edited by

Clair Brown ,

Barry J. Eichengreen and

Michael Reich

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Clair Brown: Affiliation:
University of California, Berkeley
Barry J. Eichengreen: Affiliation:
University of California, Berkeley
Michael Reich: Affiliation:
University of California, Berkeley

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Summary

Fringe benefits are of importance to such fundamental labor market problems as the social organization of work and production, as well as to social and moral obligations of citizens … They deserve more attention than they have generally received from the economic research community.

Sherwin Rosen (2000: 29)

The United Autoworkers of America (UAW) struck General Motors (GM) on September 24, 2007, for forty hours, in its first nationwide strike against the company in thirty-seven years. When negotiations broke down, UAW President Ron Gettelfinger quickly assured the media that the impasse was not about retiree health care – that is, not a mandatory subject of bargaining. This, of course, was a strong clue that the strike was largely about the car company's role in providing a promised benefit to people no longer working for it. When the news broke that the autoworkers had agreed to transfer their retiree health-care benefits from an (unfunded) defined benefit (DB) plan to a funded defined contribution (DC) plan, the Wall Street Journal called the settlement on retiree health-care plans the most important concession the union made.

The UAW had agreed that the company would transfer responsibility for retiree health care to a trust fund called a Voluntary Employee Benefits Association (VEBA). Having agreed to the VEBA, the union held out for compensatory job-security language and for sufficient funding for the VEBA. Ford and Chrysler, in typical pattern-bargaining behavior, followed and negotiated similar agreements.

Type: Chapter
Information: Labor in the Era of Globalization , pp. 241 - 263

DOI: https://doi.org/10.1017/CBO9780511809798.008 [Opens in a new window]

Publisher: Cambridge University Press

Print publication year: 2009

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7 - The New Treaty of Detroit: Are VEBAs Labor's Way Forward?

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