Introduction
The purpose of this paper is to discuss the article from the October 1, 2007 issue of Time Magazine. The article title “GM’s Get – Well Plan” is about a proposed retirement healthcare plan between General Motors and the United Auto Workers.
First I will give a brief summary of the article. Then I will give you my perspective on the article and will give you my opinion on what may happen when or if the proposed plan is implemented. Last, I will give some alternative plans that General Motors and other company’s could look into if they chose to go the route General Motors took to reduce the risk of the rising costs of the retiree health care plan.
Does GM’s Get – Well Plan really help GM Get – Well or does it help the UAW.
The article “GM’s Get – Well Plan” discusses the option of shifting retiree healthcare to a United Auto Worker trust. The article starts out by discussing the history of how General Motors got in the predicament they are currently faced with. It all started when General Motors first offered health care benefit for its retirees in the 1960’s, which seemed like a good idea at the time. No one, including General Motors would have expected health care cost to grow at the rate it did and that one day the number of retirees would out number General Motors current employees. Health care costs have actual grown three times faster than inflation and the number of employees are about 1/4 the number of retirees for General Motors. All of that has led to the problems General Motors and other company’s are having with there current retiree health care plans. To attack this problem General Motors, which others will follow, was attempting to sign a deal with the United Auto Worker. The proposed deal would include General Motors putting $50 - $60 billion dollars in a trust for the United Auto Worker to manage for the retirees of General Motors. By creating the trust General Motors believed that in the long run they would free...