PHOTO/RETIREES FOR SINGLE PAYER HEALTH CARE
DETROIT—From its beginning the UAW Voluntary Employee Beneficiaries Association (VEBA) was underfunded by 36% even by the standard actuarial estimate. In other words, the VEBA was designed to fail.
On October 11, 2013, the UAW Retiree Medical Benefits Trust, known as the UAW VEBA, submitted its report to the Department of Labor for the year 2012. Overall assets for 2012 were $58.8 billion, overall medical benefits for 2012 were $4.16 billion and overall administrative fees for 2012 were $284 million. That means that, at the end of 2012, the UAW VEBA would only last a little over 13 years.
In addition, 2013 medical benefits saw increases in copays and deductibles as well as a shift of prescription drug coverage to Medicare Part D for those eligible for Medicare. In fact, in 2014, deductibles will rise again.
This all contradicts the rosy picture presented in the report to the Department of Labor covering 2012.
The problem now is where to get the cash.
Trapped in the stock market
Sergio Marchionne, (the CEO of Chrysler and Fiat,) told the LaPresse news agency, concerning the UAW trust’s suggested sales price, “They should buy a lottery ticket.” (The Truth About Cars 9/16/13).
UAW VEBA’s financial problem is further exposed in the New Year’s Day 2014 report of Fiat’s purchase of 41.5% of Chrysler ownership from the UAW-Chrysler VEBA. This now gives Fiat total control of the company and its cash. Considering that Chrysler’s cash was used to pay for 60% of the transaction, Fiat’s Marchionne won the $12 billion lottery and gave the UAW-Chrysler VEBA a $4.35 billion tip and a wave goodbye.
Getting the cash to pay for insurance premiums for the next year is the vicious cycle that the Trust is permanently caught in.
Gambling in the Stock Market is not the solution.
The underlying problem
In 2013, Ford Europe, GM Europe’s Opel Vauxhall, Fiat-Chrysler and Peugeot-Citroen are expected to lose a combined $6.6 billion, about the same as they lost in 2012. Both European and American auto corporations see the collapse of Fiat and Chrysler as the solution to the overcapacity in auto in Europe and this country.
We are in a period of economic transformation. Machines that made us more productive are being replaced by machines that can produce for our needs with little or no human labor involved. The basis of our social relationship, a job, and the benefits related to it, are disappearing.
We must support a new independent political direction for a new social relationship based on human needs. We need a social relationship based on the production and distribution of healthcare, housing, education, food, clothing, transportation and the general wellbeing of everyone — not the select few owners of the new means of production.
