Wednesday, November 19, 2008 Capitol
Hill Watch
Automaker Bankruptcies Would Require Taxpayers To
Pay $3B Annually for Health Care, UAW President Gettelfinger
Says
Taxpayers would have to pay at least $3
billion annually in the event that the Big Three automakers -- General Motors, Chrysler and Ford -- have to file for
bankruptcy and no longer pay for retiree health care, United Auto Workers President
Ron Gettelfinger said on Tuesday during a Senate Banking
Committee hearing, the Detroit News reports. During the hearing,
Gettelfinger, as well as the CEOs of the companies, testified about the
need for emergency assistance for the auto industry (Shepardson,
Detroit News, 11/18).
Officials from UAW last week in
a meeting with congressional leaders asked for $25 billion in additional
federal loans for health care payments for retirees. The loans would help
cover the contributions from the companies to a voluntary employees'
beneficiary association for UAW retirees. Officials for the companies also
asked for $25 billion in loans to maintain operations (Kaiser Daily Health Policy Report,
11/14).
In prepared testimony, Gettelfinger said, "GM, Ford and
Chrysler are burning through their cash reserves at an unprecedented rate.
As the recent earnings reports indicate, this scenario is not
sustainable," adding, "If the government does not act to provide immediate
assistance, GM, Ford and Chrysler could be forced to liquidate." He said
that, in such an event, the "federal government would be liable for a 65%
tax credit to cover the health care costs of pre-Medicare auto retirees
costing about $3 billion per year."
Gettelfinger also rejected new
concessions by UAW on wages or retiree benefits as some lawmakers have
demanded as a condition of emergency assistance for the auto industry. He
said, "We do not believe there is any justification for conditioning
assistance to the Detroit-based auto companies on further deep cuts in
wages and benefits for active and retired workers" (Detroit
News, 11/18).