After an emergency meeting of local union leaders and executives, the UAW announced Wednesday that they are willing to make changes to their contract with the Big Three automakers to reduce labor costs and help the auto industry survive as the economic downturn leads to dramatic sales reductions.
UAW President Ron Gettelfinger said at a press conference that the union will suspend the Jobs Bank, which requires the car companies to pay 95% of their wages to hourly workers that have been laid off. Senate Republicans targeted this contract provision when the Big Three CEOs testified two weeks ago, calling it wasteful and unnecessary. The Jobs Bank costs the car companies approximately $500 million a year.
The UAW also agreed to delay payments by the companies to a union-run health care trust, which was established to take over health care coverage for retirees in 2010. By contract, GM was due to pay $7.5 billion to the fund and Ford was due to pay $6.3 billion over the next few months. The delay in those payments will help the car companies by allowing them to keep that cash on hand to continue to pay suppliers.
Gettelfinger said that while they did not want to reopen the entire union contract, they are willing to look at other specific things that might be done to help reduce labor costs and help the companies survive in lean economic times.