GM-UAW Announce New Joint Fund for Retirees

April 30, 2006
By Jerry Flint

(Don’t believe a word of the following story. It’s what Mr. Flint thinks is funny.)

Detroit (May 1) — General Motors Corporation and the United Auto Workers union today announced the creation of a joint fund to deal with what they called “one of the most serious problems worrying retirees.”

The idea is to create a fund to provide money for the education of the grandchildren of GM retirees.

It will be known as GIFT, for Grandparents’ Interests Fund Trust, and is unique among the many joint efforts set up by the company and the union.

What makes it particularly unique is the jointness — or lack of — for the funding. Under the plan, the retirees contribution would be to name the amount they want saved each year for their grandchildren. They don’t have to come up with any actual cash. GM’s part of the plan will be to put up the money.

Retirees will be able to ask for as much as $5000 a year to be set aside — by GM — for their grandchildren’s education. There can be no more than $25,000 per grandchild in any retiree’s trust fund, and the company will contribute a maximum of $500 million in any one year.

“We know this is a constant worry for our retirees and we believe this program will go a long way to alleviate their concerns,” said Rick Wagoner, the chairman and chief executive of GM. “It will be a burden, yes, but what is more important to us is the admiration and respect we have for our former employees. There is no end to what we owe them. It’s just the right thing to do.”

”Our surveys show that this is one of the most serious problems faced by our retirees,” said Dick Shoemaker, UAW vice president in charge of the union’s GM department. “We’ve covered their pensions, we’ve covered their medical costs and their drug costs. There’s enough to cover the pool cleaning, the SUV, and the help they give their children who may still be working at GM, or in the Jobs Bank, which gives them a full salary even if they are not working. But the retirees know their grandchildren won’t be working for GM because of the company’s problems. So they know the kids will need more education. This fund will cover some of that.”

In an unrelated announcement, GM said it has cancelled plans for a new car architecture known informally as “Zeta Lite.” The architecture, which is GM’s term to describe the underlying basis of a line of vehicles, was rear drive and was to be used on cars such as the proposed Chevy Camaro, Pontiac GTO, and a new line of mid-sized Buicks.

“We just don't have enough money for the program,” said a GM spokesman, “what with our other responsibilities. We’ll just have to get by with what we’ve got.”

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