Socialist ViewPoint and analysis for working people

March/April • Vol 6, No. 2 •

The Constitutional Death of the UAW

By William Hanline and friends

“What good luck for the rulers when the people do not think!”—Adolph Hitler

A few days after the “Hatchet” Steve Miller placed Delphi under bankruptcy protection [UAW Vice-President] Richard Shoemaker, AKA, “Cooperation Partner #1” took credit for having the foresight to negotiate a “Benefits Guarantee” for former GM employees who were spun-off in case Delphi went belly up financially. Whether Shoemaker’s announcement in Chicago was political or conciliatory, a question remains, did he have the foresight, or did GM and Delphi negotiate the Benefits Guarantee pursuant IRS, ERISA and U. S. Supreme Court mandates pertaining to pensions?

The fact is that the Delphi “spin-off” did not legally involve the UAW at all! The Delphi spin-off was a transaction between General Motors Corporation (GM) and the newly formed Delphi Corporation’s management. The GM-Delphi Benefits Guarantee agreement provides language (contact me for a copy), which simply states that if Delphi falls short of funding your pension or health care benefits, GM will make up the difference. Only after the Department of Labor’s and other government agencies approval the spin-off, was the UAW involved and only to the extent of negotiating the 2003 Delphi 2003 National agreement. That is why the same Benefits Guarantee was negotiated for the other Delphi employees (former GM employees) who are represented by the other national unions.

So why are they “Negotiating”? The answer is obvious. Contained in the GM-Delphi Benefits Guarantee is the following language:

“Any modification or amendment of either the Plan, or the Plan as modified and supplemented by this agreement may be made retroactively by the Corporation with consent of the union.”

Furthermore, the language states:

The corporation maintains its tax-exempt status for contributions to its pension plan and with the consent of the union, the corporation can even retroactively reap tax breaks for any modification or amendment to the pension plan, provided the changes to the “pension benefits under the Plan are not diminished.”

[UAW President] Gettelfinger and Shoemaker have already negotiated diminished retirement benefits at GM and Ford and the UAW “Cooperation Partners” are now hard at it at Chrysler and Delphi. Ironically, the Delphi pension plan and the GM pension plan for all practical purposes are one and the same.

Would GM have problems funding the Benefits Guarantee? Sounds like it would not for just recently GM’s CEO Rick Wagoner announced the GM’s pensions fund is currently $6 billion overfunded. This is strange since other reports filed by analysts place the cost of GM assuming the Benefits Guarantee in the middle of $0 to $11 billion or 6 billion dollars, which is identical to what Wagoner claims GM has in extra funds. Sounds good doesn’t it? Even though it sounds good by Wagoner’s figures, GM would have no trouble paying for the Benefits Guarantee, the reality is the PBGC (Pension Benefits Guarantee Corporation) says if GM went belly up, by the U.S. Government’s standards, the GM pension fund is 30 billion dollars underfunded.

Whom do we believe? One thing we can believe in, there is a Benefits Guarantee. If the guarantee is altered and the benefits reduced or diminished—it has been done after the fact, after the guarantee was negotiated between Delphi and GM in 1999!

Days after the “Cooperation Partner’s” announcement about the Benefits Guarantee, Brother Gregg Shotwell and I made futile requests of both International and local union officials for a signed and dated copy of the Benefits Guarantee. They refused to give us a signed and dated copy. Not wanting to, but with Shoemaker and his UAW legal counsel forcing our hand, we contacted the U.S. Department of Labor requesting they get us a “signed and dated copy” as required under Sect. 104 of the LMRDA. They did just that, for in a December 16, 2005 letter the UAW’s General Counsel Mr. Daniel W. Sherrick wrote to the Department of Labor the following:

“As you requested, I was able to find in our archives a copy of the document bearing the initials of the lead bargainers from each side, Richard Shoemaker for the UAW and Dick O’Brian for General Motors. A true copy of that paper is attached—that paper in all respects is identical to that distributed to the Local Unions, made available to the membership, and already in Mr. Shotwell’s and Mr. Hanline’s possession.”

So Brothers and Sisters in Delphi, Brother Shotwell and I would like to say “yes” there is an initialed and dated “Benefits Guarantee” with GM designed to protect your pension benefits if Delphi is granted Bankruptcy and the UAW contract with Delphi is dissolved by the Judge. We should feel fairly secure then, right? Wrong!

What could they be negotiating?

Let us look at the negotiated “Benefits Guarantee” and the concessions negotiated in the 2003 Delphi-UAW National Agreement and compare those items with the most recent demands the “Hatchet” laid on the negotiating table.

1. Miller wants to cut or reduce legacy cost (pensions and healthcare). The GM “Benefits Guarantee” does exactly that for Miller because GM would pick up our pensions or make up the difference with those benefits from the Federal Government. Under the 2003 Delphi-UAW National Agreement, all new hires will have a different type of retirement 401-K.

2. Miller wants to cut or reduce healthcare cost for both active and retired members. Again, the “Benefits Guarantee” does exactly that because a member who retires under the “Benefits Guarantee” will have the same healthcare GM employees receive at the time of their retirement, including dependents and surviving spouses. (RE: Benefits Guarantee, Page 2, paragraphs 1 and 2, and remember retirees healthcare is not backed by the PBGC)

3. Miller is demanding cuts in cost of life insurance. The “Benefits Guarantee” once again provides for GM to pay those costs instead of Delphi, Sect. d. Paragraph 1.

4. Miller wants lower wages. The UAW “Cooperation Partners” negotiated and UAW members ratified a UAW- Delphi National Agreement which contains two distinct two-tier wage packages. One package allows new hires to top out at wages we currently receive, but only over a very long period of time.

The second two-tier starting wage agreement allows new hires to top out at only $18 per hour. Remember, all new hires in Delphi will start out at 15 dollars an hour, or exactly the same level of total compensation of 21 dollars an hour range Miller says he has to have to make Delphi competitive.

Please do not let anyone say I am being anti-union or undemocratic for that is exactly what the International “Cooperation Partners” would want you to believe.

The facts are, during the 2003 negotiations I expressed my opposition to the two-tier wage agreement and reduction of retirement benefits for future employees of Delphi by doing the only things a member could possibly do, I campaigned against the agreement and I voted No! I am simply reminding members in Delphi and GM that they voted and ratified the agreements. Therefore, those agreements or language expresses the democratic will of the members and I am just advocating your desires. How could that be anti-union or undemocratic?

Delphi UAW members need to ask the “Cooperation Partners” two very important questions. 1. We need to ask the UAW to produce a copy of the (Notice) describing Delphi’s financial position and have it disseminated to all UAW-Delphi members. 2. Ask the “Cooperation Partners,” has Delphi’s Financial Officer notified in writing (The Notice) to GM’s Financial Officer the position of Financial Distress Delphi is experiencing and if they have, is the Benefits Guarantee in effect at this time and is GM already paying for various Delphi retirement benefits? If the answer is “yes” then we need to ask Shoemaker and Gettelfinger, what in the hell are they doing in negotiations? All they can accomplish is negotiate away more of our benefits!

For example: In a January 23, 2006, Automotive News article, David Barkholz wrote that the “traitor” to the UAW Constitution and his membership, Ron Gettelfinger said the healthcare concessions to GM and Ford had been excruciatingly painful to the union, “but it was the right thing to do.”

Right thing to do? For whom? It will not be excruciating for Gettelfinger because he has a UAW pension plan that pays 100 percent for all those retirement benefits. However, for the retirees who cannot afford the cuts from their fixed incomes, and for their communities, it will be disastrous.

All GM has to do is give Miller what he desires by implementing the Benefits Guarantee. For in reality, isn’t getting rid of the older workers what Miller and Wagoner truly desire? To get the worker with 30 or more years seniority who draws $1,300 a week out of the plant and put on retirement drawing from the pension plan? Funny thing, that degree of attrition could be easily accomplished if Wagoner would offer us the incentives it would take to encourage us to make the move.

GM and Delphi Shareholders might be surprised to find out that GM and Delphi could have done the latter with the money they have already paid to the legal counsels to file bankruptcy! All UAW members in Delphi should send the “Cooperation Partners” a message: Concessions do not save Jobs! Stop Messing With Our Benefits!

Work to Rule!

To contact Bill Hanline for more information, he can be reached at,

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