Chuck Brodell retired in 2009 after his local Chrysler assembly plant closed and he said he has not seen his monthly pension checks increase since.
He and other UAW retirees are hoping this year’s negotiations with the Detroit 3 will change that.
The UAW began contract negotiations with Stellantis, Ford Motor Co. and General Motors in July. Three of the UAW’s core demands target retirement: They want the companies to increase retiree pay, re-establish retiree medical benefits and guarantee defined benefit pensions.
When Brodell began at the Chrysler St. Louis South Assembly plant in the 1990s, he was working six days a week, 10 hours a day. But by 2007, the plant was slated to close and the next few years would see the Detroit 3 end pensions and medical coverage for future retirees amid the Great Recession. The current demands in many ways seek to win back benefits that were lost.
“In 2007, we took a tremendous amount of concessions for the Big 3’s survival,” Brodell said. Now, “I hope that the companies look back and remember the retirees that are the ones that put them in the position they are in today.”
Typically, retiree benefits are considered permissive bargaining items, Marick Masters, a business professor at Wayne State University in Detroit who specializes in labor issues, told Automotive News. However, the UAW has contracts with the Detroit 3 that cover retiree benefits, so they are presumably bargainable, he said.
GM declined to comment on the status of retiree benefits in negotiations. A spokesperson for Stellantis said “any discussions around retirees and their benefits are not a mandatory subject of bargaining.
Ford issued this statement in response to a query from Automotive News: “We are committed to creating opportunity for every UAW worker to build a great career and become a full-time permanent Ford employee with good middle-class wages and benefits. We continue to negotiate with the UAW and build on our strong track record of creative solutions as our dramatically changing industry needs a skilled and competitive workforce more than ever.”
The rallying cry to “remember the retirees” comes up in nearly every bargaining cycle. For those who receive a pension, increasing monthly pay is a key issue this year. Joe Shields, a retiree out of the UAW Local 110, framed the problem as such:
“Everything is going up except your monthly check.”
Both Shields and Brodell have also seen an end to the Christmas bonuses that had previously supplemented their income. The combined hit to their buying power has increasingly strained retirees’ finances.
“We have to make choices: Do I pay the electric bill? Do I pay the gas bill? Do I take less trips in my car?” Brodell said. “I don’t have expendable income to offset the increase in costs.”
The Detroit 3 cast off the future weight of pensions amid the recession in favor of a 401(k) system. Now, it is unlikely that the companies would be willing to increase their burden of monthly payments to retirees, according to Masters. At most, they might be willing to “provide a lump-sum contribution to retirees,” he said.
At the same time, high profits and substantial CEO compensation have become hotly discussed topics this round of negotiations. GM CEO Mary Barra made just over $34 million last year, Ford CEO Jim Farley made over $18 million and Stellantis CEO Carlos Tavares made about $26 million.
John Bell said he is a member of Michigan’s Local 594 retiree chapter and believes it is only right that active members and retirees get a bigger slice of the pie.
“I don’t want to cut into profits so much that (the Detroit 3) wind up closing plants and laying folks off,” Bell said. But he said he believes there is enough that “a very substantial chunk of money” could support employees and beef up retiree benefits.
Shields and Brodell are confident that Fain will push for progress on retiree issues in negotiations. Bell is more skeptical about what is actually possible but remains optimistic.
Negotiations start with “dreams on both sides,” Bell said. “And then they narrow it down.”
Before the recession, the Detroit 3 covered medical costs for both active and former UAW members for an annual combined cost of about $12 billion in 2007, according to the New York Times.
That ended when the automakers came under pressure to cut liabilities, Masters said. The ultimate solution was to create a health care trust, called a Voluntary Employee Beneficiary Association, that would take on the responsibility for medical benefits.
Those who retired after the establishment of the trust do not have access to retiree medical coverage. The UAW would not share specific details of their requests but is entreating the Detroit 3 to work with the union to find a way to reestablish retiree coverage.
The VEBA system has largely been hailed as a success, and the program has gained stability through brighter investment prospects and management of costs. Bell and Brodell expressed satisfaction with their medical coverage.
Unlike most unions, UAW retirees vote in elections for union leadership. Fain is going to have to answer to the retirees if he fails to win them anything, Masters said.
UAW leadership “know that they just won this presidential vote by an eyelash and that they’re going to have to do as much as they possibly can for their retirees to get the support of as many of them as possible,” he added.
The UAW has outlined 10 core demands for the Detroit 3 and members have authorized a strike if negotiations break down by the Sept. 14 deadline. Retiree benefits make up less than a third of the ask, but Brodell, Shields and Bell said current union members should be actively invested in the retiree benefits that could be at stake.
“We had a stick and a piece of cardboard, and we were on the concrete for days,” Bell said. “We made those sacrifices not only for our futures but for theirs as well.”
