Using the numbers from the Detroit News Article.

http://www.detnews.com/2005/autosins...A01-356532.htm

118,000 employees give up $1.00 per hour raise assuming 2,000 hours per year: $236,000,000 (two hundred thirty-six million).

500,000 retirees and families pay a max of $752 annual premiums: $376,000,000 (seven hundred fifty-two million). (This doesn't take into consideration the 74,000 retirees that won't pay because their pension is below $8,000 and also assumes all of th 500,000 will pay the family rate)

Total Savings: $612,000,000 (Six hundred twelve million)

GM agrees to pay $1,000,000,000 (one billion) anually to the Voluntary Employee Benefits Association.

Net additional cost to GM: $388,000,000 (three hundred eighty-eight million)

Yet the reports say GM will save $3,000,000,000 (three billion) before taxes, 1 billion after taxes, through this deal.

What am I missing?!?

 

Woopedadooo, I pay 752+ a month. Cry me a river.

 

Oh, you mean this massive concession by the UAW still means they make out better than 99% of the rest of us? You don't say...

 

poSSum: I'm guessing the article didn't list all of the exact details of the agreement...

JasonE:

 

GM has a way that they could save big bucks. If anyone knows anything about HSA plans (what we're going to starting in Jan - Thank GOD!, lol)

They should FORCE their employees to go with a HSA account and contribute towards their deductible. Not only would this help them build retirement savings, it would also add 118k+ people that are concious of their Health Care Spending. This would lower costs overall for Everyone.

I'd expect it would cut their health care costs by 2/3. We as a population are too ignorant of our health care spending especially when we only have co-pays. Whens the last time you shopped around for a cheaper procedure? Tonsils removed at a hospital is approx a $4k charge for the facility. It's about a $1k charge at a "surgery center" with less hassle.

With my HSA starting in Jan I will be saving 50% a month (even with contributions to the HSA) and by the time I retire I predict $250,000 saved up in the HSA to offset medicare expenses. Win/Win. Think about it GM.

 

HSA's are being offered (and encouraged) this year at the General, but they are not mandatory.

I'll certainly be looking at it.

Honestly, in my current situation (s26 yrs old, generally healthy/athletic male who almost never gets sick, single with no kids), I pick one of the lower cost health care options. I have to look into our options more this year (we are currently in our enrollment period for next year).

 

Well the bigger problem for both Ford and Gm is they need to transition from a defined benefit retirement (pension) to a defined contribution plan (401k).

The pension costs are bigger than the healthcare costs ever dreamed of being. The coming crisis of the big 2 and pensions is just a microcosm of the US--> Social Security (another defined benefit plan).

 

There are only 3-4 $1 billion payments. It is not a yearly contribution. DB's are great for employees. We had one that contributed 19% of our gross pay for us. They are monumentally expensive for employers. I work in the DB field currently.