General Motors is not obligated to honor a pre-bankruptcy contract between the automaker, its affiliate, Delphi, and the United Auto Workers to cover $450 million in retiree medical benefits, a federal judge says, according to Reuters. The contract in question was enacted two years before GM's June 2009 bankruptcy filing.

When UAW entered a medical benefit contract with post-bankruptcy GM in July 2009, the payment reportedly was not included. Contrary to UAW's claim that GM is obligated to make the payment because Delphi emerged from bankruptcy in October 2009, US District Judge Avern Cohn says that the language in the July 2009 contract made it clear that GM doesn't owe that $450 million in medical benefits.

"Whether New GM has a moral obligation regarding the payment is another matter and not relevant," part of Cohn's 36-page decision reportedly reads. "The UAW's efforts to turn the absence of language into language is reminiscent of the efforts to capture a 'will o' the wisp."

Bob King, UAW's president, says the union is considering whether to appeal the decision or not.


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  • 48 Comments
      K diddy
      • 1 Year Ago
      hahaha, Obama's bailout screwed us taxpayers and now the retirees.
      laddy
      • 1 Year Ago
      Where is that great union rep at now!!! HA HA HA HA HA HA HA the bail out did not work you got screwed by a democrat and your sorry union HA HA HA HA HA HA!!
      David MacGillis
      • 1 Year Ago
      What people aren\'t getting here is that this was an agreement reached before the bankruptcy and the bankruptcy involved another set of negotiations that the UAW agreed to And that the deal they got in the bankruptcy was excellent compared to what the salaried folks got and especially what the Delphi/Nexteer folks got. A lot of people \"gave their lives\" to GM and got shafted, that\'s how bankruptcy works. In the UAW\'s case, the shaft was 6\" long, in the Nexteer folks case, it was 6\'.
        Bubba Do
        • 1 Year Ago
        @David MacGillis
        It is sad this has happened. Problem is too many people place their faith in the union and when the chips are down they forget about the rank and file. Hurray for the union management and to hell with rank and file!!!!!
      JimL
      • 1 Year Ago
      I do not know why the auto union members are upset, they helped put Obama in place, got him to bail out the big auto builders, got a seat on the board of directors of GM, so why blame the auto industry for trying to save their companies by saving all that money the union made them responsible for, they got what they voted for.
      tump
      • 1 Year Ago
      And if this country had universal healthcare (like all the best countries) then this wouldn't even be an issue.
        PTC DAWG
        • 1 Year Ago
        @tump
        Taxes would be even higher, waits for surgery's, etc. would be common. There is no silver bullet. Nothing is free.
          aatbloke1967
          • 1 Year Ago
          @PTC DAWG
          "m_2012,, tell that to countries with free healthcare. If it can be done without taxes on people, the countries with UHC haven't found a way. People in these countries usually pay far more in taxes than we do. Nothing is for free, nothing. Government doesn't just make something free, it takes the power you have away from you, obscures the cost and makes you pay for it in some other way. And it usually doesn't do this very efficiently, it usually wastes a ton of money along the way." Rubbish. Taxpayers in Western European countries for the most part have a lower direct taxation burden than the United States. Social security tax ranges from 9-15% compared to 7.65% in the US, and is capped on employees at varying thresholds. That difference is more than outweighed by the extra costs in premiums and uncovered claims in the US system. Furthermore, the "removal of power" from the individual in systems using national health is a complete fabrication. People have the right to use whichever doctor they choose who subscribe to the national system, which most do.
          m_2012
          • 1 Year Ago
          @PTC DAWG
          They would not be higher if we spent more than a few cents per dollar on actual healthcare. Instead we allow record profits and laws written to protect insurance companies and pharmaceuticals. We create a false war on drugs to make sure real medicine is not allowed to compete with them.
          aatbloke1967
          • 1 Year Ago
          @PTC DAWG
          "Taxes would be even higher, waits for surgery's, etc. would be common." Clearly written by someone who has never lived with national healthcare. If the US adopted national healthcare. social security tax would increase marginally, however the overall cost of healthcare for the average individual would greatly decrease, and furthermore there wouldn't be a huge proportion of the populace without any healthcare access whatsoever. Bankruptcies would almost certainly fall. Waiting for surgery is a complete myth. There can be waiting times for issues such as hip replacements, but they're not exhaustive and nothing that devalues quality of life. My experience of healthcare in Europe and the US is that they're equal in terms of quality of care, certainly so with hospitalisation. The present US system is probably the best system on earth if you're at the very least a multi-millionaire and money is literally no object; for everyone else it's probably the most corrupted and twisted system one could ever imagine.
          usa1
          • 1 Year Ago
          @PTC DAWG
          It's baffling to me when people defend our health care system when it results in costs that are twice of many other developed countries with lower life expectancy lower to boot. http://en.wikipedia.org/wiki/File:Life_expectancy_vs_healthcare_spending.jpg
          l5kream
          • 1 Year Ago
          @PTC DAWG
          m_2012, tell that to countries with free healthcare. If it can be done without taxes on people, the countries with UHC haven't found a way. People in these countries usually pay far more in taxes than we do. Nothing is for free, nothing. Government doesn't just make something free, it takes the power you have away from you, obscures the cost and makes you pay for it in some other way. And it usually doesn't do this very efficiently, it usually wastes a ton of money along the way.
          Sean Conrad
          • 1 Year Ago
          @PTC DAWG
          No one with half a brain says it would be free. Of course taxes would be higher, but for the vast, vast majority of people it'd still be cheaper than your healthcare premiums. Waits for surgeries would be set by severity, the sicker you are, the sooner you get your appointment. No one in countries with universal health care (read: the rest of the modern world) with life-threatening diseases is sitting in line behind someone getting a boob job.
        jebibudala
        • 1 Year Ago
        @tump
        I'm sensing sarcasm. Let me know anyone finds any Canadians that are cancer survivors. I personally know of two Canadians that got put on the "Canadian waiting list of death". Canadian system = 2 YEARS before treatment would begin, whereas both DID receive immediate treatment in the US. Fortunately one of my friends survived, where she had a 0% chance of survival by waiting on the Canadian health system.
          Kronos
          • 1 Year Ago
          @jebibudala
          Nice anecdote but the stats tell a different story. Canada's healthcare outcomes are at least equal to those of the US. The major difference is cost (regardless of payer). In depth: http://en.wikipedia.org/wiki/Comparison_of_the_health_care_systems_in_Canada_and_the_United_States#Cancer
      flammablewater
      • 1 Year Ago
      When the government so graciously bailed out the company with the tax dollars of its employees, there should have been requirements for covering this kind of thing. GM better pay up.
        aatbloke1967
        • 1 Year Ago
        @flammablewater
        I don't think you truly realise the scale of the effect of allowing the US motor industry to have gone bankrupt. It would have created mass unemployment not only directly, but also for its suppliers, suppliers of suppliers, suppliers of suppliers of suppliers, and so on, fanning out to effect even the sandwich shops which cater to those employees at lunchtimes. You're talking as many as tens of millions ultimately, with lost tax revenues from all sources, not just incomes - creating governmental cutbacks the likes the US hasn't seen in recent history. Many financial institutions would have been decimated, and the knock-on effect in terms of low demand would have affected everyone from cellphone providers to waste refuse haulers. It would have rendered some parts of the United States economic wastelands, and would have almost certainly created a global depression.
          aatbloke1967
          • 1 Year Ago
          @aatbloke1967
          There's a difference between being insolvent - which US automakers were prior to their bailout - and bankruptcy which liquidates a business and sells off its assets. General Motors entered into a chapter 11 reorganisation, which in the US is dealt with via a bankruptcy court. As part of that reorganisation, the government paid a substantial amount to purchase shares in the new company in order to provide it with working capital with the proviso that the company radically restructure itself by severely rationalising itself. In the world of finance and accountancy, a full and complete bankruptcy entails complete cessation of business activities with the sale of fixed assets to partially pay for the company's primary debtors - usually governmental entities. There are clearly not many finance professionals on these boards who understand the difference.
          clquake
          • 1 Year Ago
          @aatbloke1967
          For you people who think all bankruptcies are the same, take a peek at the bankrupt companies that are no longer around vs the bankrupt ones that are. There are different types of bankruptcies. The bailouts led to reorganization (which goes through bankruptcy court). Without the bailouts, they would have had to cease operations completely, i.e. Saab. The unions already got their money, they're just looking for more.
          Pj Taintz
          • 1 Year Ago
          @aatbloke1967
          GM DID go bankrupt!!! How can people on this page of all pages still not understand that simple fact?? we threw all this money at them and they STILL went bankrupt!
        Rob
        • 1 Year Ago
        @flammablewater
        You clearly have no clue what happened. The bailout bailed out the union and the pension fund of the employees. Nearly every cent went to them with a few pennies to the shareholders. They may not get this $450 million, but they got tens of BILLIONS already from the US taxpayer to fund their bloated pensions and wages.
          David MacGillis
          • 1 Year Ago
          @Rob
          Actually what this is, is the UAW coming back to the trough looking for more after making a deal in the bankruptcy and using a previous agreement with a now defunct company as the reason that General Motors Company owes them some more money.
      Scott
      • 1 Year Ago
      Sounds like a pretty clear-cut contract case. Where were all of the high-priced UAW attorneys when the contract was signed in 2009?
      Big Squid
      • 1 Year Ago
      All you shills and astroturfers on the GM payroll best pay attention. When it comes time for you to retire, what is your loyalty to GM going to get you? As the Sicilians say, ugazz' in culo.
        Ducman69
        • 1 Year Ago
        @Big Squid
        UAW and loyalty? ROLFMAO! They helped run the company into the ground with their outrageous demands and poor work culture in the first place.
          laddy
          • 1 Year Ago
          @Ducman69
          Hey stinkeye ask those at Hostess how the bakers union killed their jobs, 5,000 striking idiots caused 15,500 their jobs. SO now tell us more about these great unions!!! you like the price of these cars they build, they drove the costs up think about it if you can!!!!
          Stinkeye
          • 1 Year Ago
          @Ducman69
          Hey dude contracts have 2 parties. It's esy to lay blame on the unions but who makes the agreements with the unions, management and their highly paid team of experts. If management knows they can't honor union demands and still agree to them then how does that fall on the union? Seems poor decision making on the management side and failure to negoiate in good faith are one of the roots here. Ever buy a used car? Asking price, offered price and selling price are different.
      grumpy
      • 1 Year Ago
      I have said this before regarding Detroit's bankruptcy and I will say it now. We need to find a middle ground between villain and victim. You can be both. Nobody should have been surprised by the GM bankruptcy (just like the Detroit bankruptcy), yet there are those who now want to be called victim who knew it was coming but didn't care because they thought they would get theirs, even if the house of cards collapsed all around them. That means that in a way they are both victim and villain. They are sleeping the the bed they made. If that's how you wish to live, so be it... but don't expect my sympathy or access to my pocket to bail you out.
      v6sonoma
      • 1 Year Ago
      While it really sucks for the people that are affected what would you expect a company to do? They are like all companies and are in the business of making money. At this point they are not required to pay the money. Had they gone under they wouldn't even be around to give them the money. Do you think their stockholders care about those people? It would be nice if they were to step up and take care of them but as a business no one should be surprised if they don't.
        Rob
        • 1 Year Ago
        @v6sonoma
        Ummmm.......They have nothing to complain about. This explains it well, although I think the final loss was $15billion. http://www.dailywealth.com/2125/gm-americas-biggest-bankruptcy
          ngiotta
          • 1 Year Ago
          @Rob
          So you're hypothesizing that all 1+ million GM employees are unemployable anywhere else and would have been on perpetual unemployment? I don't disagree that it would have been bad news, but to say that the vast majority wouldn't get jobs somewhere else is completely bunk.
          m_2012
          • 1 Year Ago
          @Rob
          Most of them already have new jobs. People saw the writing on the wall and bailed. They saved the replacement jobs, which are much lower paying anyways.
      Bubba Do
      • 1 Year Ago
      The unions live by the sword and die buy the sword. Looks like obama screwed them in the end!!!!! Aren't you glad you followed the union telling you to vote for that clown. Let it be a lesson to all union rank and file. Union powers to be will continue to dip in you pockets (DUES) and live high on the hog riding on your back.
      icemilkcoffee
      • 1 Year Ago
      Sounds like somebody dropped the ball big time. The guys negotiating at the Delphi bankruptcy forgot to talk to the guys negotiating at the GM bankruptcy.
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