Reuters Investigates

Stress testing the UAW

By Deepa Seetharaman

Today’s special report from Detroit, “Crunch time for America’s richest union,” takes a close look at the finances of the historic United Auto Workers union.

Over its 76 years, the UAW has built up a more than $1 billion war chest that has proven to be its big stick at the negotiating table and on the political stage.

Most of the UAW’s wealth sits in its strike fund, which stood at $763 million at end 2010. That money can only be used to fund strikes unless UAW representatives approve a change to the constitution, a step possible every four years.

The sheer size of the strike fund hides the weakening of the UAW’s finances, particularly since 2007, a period when the U.S. auto industry nearly collapsed and membership fell by about a fifth.

At first glance, the UAW’s financial reports show that overall cash receipts and disbursements have fallen almost exactly in tandem. But a deeper look shows that since 2007, the UAW has relied more and more on selling its investments to offset the sharp drop in dues, its largest source of annual funding.

As shown in the graphic below, in 2007 dues represented more than half the UAW’s incoming revenue, while investment and assets sales were just over 6 percent, according to U.S. Labor Department filings. By 2010, dues composed 43 percent of the UAW’s income, while sales of investments and assets were 23 percent.

Somebody’s been making money on Ford

Here’s a line from our special report on Ford from Detroit today, by Bernie Woodall and Kevin Krolicki, who spent some quality time with Bill Ford earlier this week.

A $100,000 investment in the company’s stock at the bottom in late 2008 — when its cross-town rivals GM and Chrysler were nearing government bailouts — would be worth $1.8 million today.

For more graphics and a full multimedia version of the story, click here.

How visible is the hand of Treasury in steering GM?

By Kevin Krolicki

“What we are not doing — what I have no interest in doing — is running GM.”  — President Barack Obama, June 2009.

GM has undergone massive changes in the nearly year and a half since the Obama administration stepped in to save and restructure the company in bankruptcy to spare it from liquidation and to save hundreds of thousands of American jobs.

But how well has the White House done with its pledge to stay out of the management of GM after its $50 billion bailout?

A Reuters review of the record leading up to the GM initial public offering of stock expected later this month shows that the Treasury has called the shots on key aspects of the deal, including its speed, size, the fees paid to bankers and the involvement of sovereign wealth funds. You can read the special report here.

For a PDF version, click here.

Since publication, readers have written back with some interesting points about GM and its coming stock offering. To respond: