The GM settlement boils down to a matter of trust

[Slowrider5]

Howie Makem looked tired, which was understandable.

He'd come down to Galveston to unwind after a round of contract talks and a brief strike by autoworkers at his employer, General Motors.

I'd first learned of Howie in the early 1990s from reading Ben Hamper's Rivethead, a book about his years working at a GM plant in Flint, Mich.

Howie was a mascot of sorts. Known as the Quality Cat, he was trotted out by GM managers to boost morale and improve performance on the assembly line. Here's how Hamper described him:

"Howie Makem stood 5 feet 9. He had light brown fur, long synthetic whiskers and a head the size of a Datsun. He wore a long red cape emblazoned with the letter Q for Quality. A very magical cat, Howie walked everywhere on his hind paws."

I wanted to find out how morale was faring now that GM reached a landmark agreement to fund worker health care costs through a trust managed by the United Auto Workers union.

I caught up with him in the lobby of the Hotel Galvez, and with a little persuasion, he agreed to talk. I don't want to seem immodest, but my column has something of a following among corporate mascots.

"Howie, you don't look so good," I said.

"I'm fine. Really." The fur on his oversized head was matted on one side, and there were a few bald patches through which his papier-mâché was showing. His right ear had a piece missing from the lobe. His cape was dirty and torn.

'Win-win' deal
"OK, I'll get to the point," I said. "Is this contract a good deal?"

"It's a win-win," he replied. "For GM, it means we get to offload health care costs. For workers, it means their medical costs will be covered for life."

"How can they be sure?"

"Because the money's in a trust. And the best part is those health care costs will no longer be on GM's books."

"But GM is funding the trust, so it still has to pay the costs."

"Yes, but now they're in a trust. The union has to figure out how to make it last."

"I don't understand how this helps the company or the workers."

"Because now our balance sheet will look better. We'll eliminate about $50 billion in expenses. So we've improved the quality of our accounting." He purred slightly as the last few words rolled off his tongue.

"I'm not sure I see how that solves the problem. Shouldn't GM be doing something more concrete, like making better cars?"

He shook his monstrous head. His fake whiskers flopped. There was a hint of impatience in his voice.

"You don't understand," he said. "The important thing is that the health care costs will now be off our balance sheet."

I could tell the Quality Cat was becoming irritated, but I decided to press the point.

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http://www.chron.com/disp/story.mpl/...y/5189904.html