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Bid For Inflation Adjustments For UAW Retirees Gets Cold Reception

May 22, 1990

KANSAS CITY, Mo. (AP) _ Members of the United Auto Workers won’t ratify new contracts this fall unless they include cost-of-living protection for retirees’ benefits, a local union leader warns.

But an effort this morning to include specific references to such inflation protection was shot down by about 2,000 delegates attending a three-day UAW bargaining convention.

The issue was killed when an effort to introduce a resolution specifically calling for the inflation adjustments for retirees fell short of the needed votes to bring it before the delegates.

Alex Wassell of Local 1776 in Willow Run, Mich., said he was disappointed that his move didn’t work. He said he didn’t believe UAW President Owen Bieber’s statement that the issue would be carried to bargaining tables this summer.

In his opening speech Monday, Bieber outlined a five-point bargaining plan for this summer’s Big Three contract negotiations, including a qualified call for cost-of-living adjustments, or COLAs, for hundreds of thousands of UAW retirees.

But Bieber declined to say whether that protection should be through lump sum payments, which the union has used before, or cost-of-living adjustments, an issue that has been gaining steam lately.

In the past, company executives and union officials have said such a contract provision could be extremely expensive and could trigger benefit cuts for active workers.

Inflation protection for retirees is attracting more attention in the union for several reasons. The average age of UAW members at the Big Three automakers is about 45 years old, and many workers are approaching retirement age.

Also, there are nearly as many retirees as there are active workers. The UAW contracts with the Big Three cover about 500,000 workers.

In his address, Bieber kept open the possibility of pushing for inflation protection when bargaining with General Motors Corp., Ford Motor Co. and Chrysler Corp. begins in July.

″While I can’t tell you the exact formula by which we will reach our destination this year,″ Bieber said, ″I can tell you absolutely that we will achieve the goals we all share of improving, current benefit levels and ensuring that those gains are protected against inflation in future years.″

Jerry Melillo, president of Local 1250 at Ford Motor Co.’s Cleveland engine plant, is a prominent advocate of COLA for retirees. He said Bieber’s comments seemed a little stronger than in the past, but not strong enough.

Melillo and others at a COLA rally Monday had some stern warnings about their issue.

″We have to come back with COLA in ’90 to get ratification of the agreements,″ Melillo said.

For the first time in 11 years, UAW contracts with GM, Ford and Chrysler expire at the same moment - midnight, Sept. 14.

Bieber ticked off a list of bargaining priorities when the union sits down with the Big Three shortly after Independence Day.

Topping the list, as expected, is job and income security, followed by wage and benefit increases, maintenance of health care benefits, help for retirees and more responsible management.

But retiree issues promised to snare most of the attention at the convention. UAW members handed out fliers at the entrance and about two dozen people in the visitors’ gallery held signs urging that cost of living protection be included in Big Three contracts.

Recognizing them, Bieber departed from his prepared speech to make some political points.

″I want to make sure we all understand that we are the one single union in this country ... to reach back and provide increases for our retirees,″ he said.

In the past the union has used lump sum payments to help protect retirees from inflation, which erodes their pension benefits. COLA backers say those payments have been eaten up by inlation themselves.

Bieber reminded delegates that a proposal before GM’s annual meeting on Friday would change the formula used in figuring top executives’ pensions and would double GM Chairman Roger Smith’s annual pension to about $1.1 million.

″Let me point out that we’re not asking for anything like the kind of increase Roger will get,″ Bieber said. ″But we are asking for decency and fair treatment. In fact, we’re demanding it and we won’t settle without it.″

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