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United Auto Workers Assembles Team To Examine GM Financial Records |
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United Auto Workers has hired a team of financial advisers to conduct an analysis of... General Motors' finances and examine executives' claims that the union must make concessions on health benefits before the 2007 expiration of its contract in order for the automaker to return to profitability, the Wall Street Journal reports (White/Hawkins, Wall Street Journal, 7/25). GM on Wednesday reported a second-quarter net loss of $286 million, including a $1.2 billion loss for its North American operations, in part because of higher health care costs. For the first quarter, GM -- which in 2005 expects to spend $5.6 billion on health benefits for more than one million workers, retirees and family members -- reported a loss of $1.1 billion for North American operations. UAW President Ron Gettelfinger has said that GM has not produced evidence that concessions on health benefits are necessary (Kaiser Daily Health Policy Report, 7/21). In June, Gettelfinger said UAW had plans to hire outside advisers to assess GM's finances. Gettelfinger at the time noted the company still pays more than $1 billion annually in common-stock dividends and that GM management has said the company expects U.S. profits to recover as it launches new car models. UAW spokesperson Paul Krell said there is no deadline for a report from the team, which includes investment bank Lazard, the law firm Cleary Gottlieb Steen & Hamilton, financial firm Leon Potok and Washington, D.C.-based actuarial firm Milliman. Krell said the team currently is gathering information, adding, "We are going to do this thoroughly. That's not to suggest there's any foot dragging here." GM CFO John Devine declined to comment on whether GM will allow the UAW team access to its financial records but added, "[W]e've been very open with the UAW's leadership on our financials" (Wall Street Journal, 7/25). NYT Examines Impact on Investors In related news, the New York Times on Monday examined the impact of large corporations' health care costs on investment values. Financial experts say health care costs, particularly for retirees, are becoming a "big drag" on stock and bond values for automakers, airlines, railroads, telecommunication firms and other corporations. David Zion, an accounting analyst at Credit Suisse First Boston, said health care costs increases have outpaced revenue growth for many companies, leaving management with "dwindling options." Richard Bernstein, chief U.S. strategist for Merrill Lynch, said, "If we are not careful, we'll see a lot of corporations default on both their health care and their pensions" (Freudenheim, New York Times, 7/25). United Auto Workers "Reprinted with permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation RX-meds Flavoured Tabs Wows Pills Stop Pill Shop Ultra Sperm Only Softtabs Only Zenegra Super Max |
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