It's estimated that of the 270,000 retired workers and their 70,000 surviving spouses, GM will need to pay over $50 billion in health care costs – but it doesn't have the funds. The move to offer signing bonuses to current workers was devised so that GM could lose the insurmountable health care costs that will likely go up in the coming years, and replace them with lump sums now, when the General can afford it.
The plan is to set up union-controlled trust funds that would receive stocks and cash, and would negate the need for GM to foot the bill. However, negotiations, which have been in constant turmoil, have broken down again, with the two parties conflicted on how much money to throw into the assets and what happens if health care costs exceed the amount of money stored up by the UAW.
[Source: Detroit News]