Report to members on the union’s finances

As many of you are no doubt aware, the maintenance unit at Volkswagen in Chattanooga, Tennessee, overwhelmingly voted in a federally supervised election in December to have the UAW as its legally recognized collective bargaining representative.

These efforts at providing representation to workers who ask for it are critical to our union’s goal of building density within the auto sector. It’s a virtuous circle: The more

Secretary-Treasurer Gary Casteel

density we have, the stronger position we are in to negotiate contracts that provide good wages and stable benefits for our members. Additional members translate into more resources for organizing campaigns. Successful organizing campaigns bring in more members, which build density within the auto sector and add bargaining strength. We’re proud of our new brothers and sisters at Local 42 at Volkswagen and are prepared to do all we can to assist them as they negotiate a first contract.

Having more members also helps stabilize the union’s finances, which are detailed in the pages that follow. The successful conclusion of recent negotiations at Ford Motor Co., General Motors, FCA USA, John Deere, in the auto parts industry, in gaming, higher education, defense and elsewhere, positions our union for increased growth in all of the industries and workplaces where we represent workers.

A potential obstacle — and opportunity — is the 2016 election season. Our participation in politics isn’t ideologically driven: It’s simply the key to our survival and growth. We saw how critical political participation was in 2008 and 2009 when the domestic auto industry was on its heels. Without our support for President Obama, it’s possible the entire industry, including the supply chain, would have collapsed.

Nor would we have appointees to the National Labor Relations Board (NLRB) who understand the difficulties involved when workers try to have a voice on the job.

Conversely, when voters sit on the sidelines as they did in the 2014, anti-worker lawmakers are elected, and progress for workers stalls — or begins to roll back. This coming election will determine which president will select Supreme Court justices and appointments to boards such as the NRLB and OSHA. Elections at the state and local levels also impact the bargaining strength we have.

We cannot afford to be complacent.

This financial report provides information about the union’s financial position. Among the highlights:

  • The union’s total fund balance at the end of 2014 was $913,220,459.44.
  • Total income in 2014 was $165 million, while total expenses were $180 The difference is $15 million of disbursements in excess of receipts.
  • Overall active and retired membership stood at 971,152.
  • Approximately 404 UAW members went on strike or were locked out in 2014, and they received over $ 2.8 million from the union’s Strike and Defense Fund, which pays for weekly benefits, medical assistance, and other  expenditures.

The following is a summary from UAW Secretary-Treasurer Gary Casteel. The full report is available for examination at all local unions.

FOR THE YEAR ENDED DECEMBER 31, 2014

At the direction of the International Trustees, Clarence H. Johnson, P.C., Certified Public Accountants, have audited the books of the International Union, UAW for the year ended December 31, 2014.

The following report reflects the changes in the financial position of the International Union, UAW as of December 31, 2014 in comparison to our Union’s financial position as of December 31, 2013.

OVERVIEW OF UAW FINANCIAL STRUCTURE

The International Union’s financial structure is based on a system of individual funds. The UAW Constitution establishes this system and sets forth the source of income and objectives of each fund. The Secretary-Treasurer’s office ensures compliance with the Constitution by segregating all of the Union’s financial resources into separate funds and otherwise ensuring that expenditures are made in accordance with the Constitution. The Union has a total of 11 separate funds. The combined resources of these 11 funds are set forth in the figures below.

A summary of several of the Union’s larger funds is also included in this report.

TOTAL ASSETS

Total Assets were $923,253,016.91 as of December 31, 2014, a decrease of $14,809,001.97 from the Total Assets of $938,062,018.88 as of December 31, 2013. Total assets are primarily comprised of cash on hand and the cost of various investment securities. Total assets also include other less liquid assets such as real and personal property that are used in the day to day operations of the union.

TOTAL LIABILITIES

Total Liabilities, consisting of Loans Payable, Rebates to Local Union and General Fund, Payroll Deductions Payable and Monies Due to Affiliated Organizations were $10,032,557.47 as of December 31, 2014, an increase of $368,919.38 from Total Liabilities of $9,663,638.09 as of December 31, 2013.

TOTAL FUND BALANCE

The Total Fund Balance of the International Union, represented by Total Assets less Total Liabilities, was $913,220,459.44 as of December 31, 2014. This is a decrease of $15,177,921.35 from the Union’s Fund Balance of $928,398,380.79 as of December 31, 2013.

GENERAL FUND ASSETS

General Fund Assets, which include portions of Cash, Investments, Accounts Receivable, Notes Receivable, Inventories for Resale, Furniture, Equipment, Vehicles, and the Union Building Corporation, totaled $186,438,997.38 as of December 31, 2014.

GENERAL FUND LIABILITIES

General Fund Liabilities amounted to $2,694,412.94 as of December 31, 2014. These liabilities consist of Local Union Loans Payable totaling $345,000.00, Payroll Taxes Payable to be forwarded in the amount of $328,120.97, Accounts Payable to Troubled Workers totaling $486,463.60, and Accounts

Payable to Affiliated Organizations at $1,534,828.37.

GENERAL FUND BALANCE

The General Fund Balance, which is represented by General Fund Resources less General Fund Liabilities, amounted to $183,744,584.44 as of December 31, 2014. Of this amount, $45,050,084.25 of the General Fund balance represents cash and investments, which are available to meet the day-to-day expenses of the Fund. General Fund Cash and Cash Equivalents increased by $25,133,644.02 from December 31, 2013.

The remaining balance of the General Fund, $138,694,500.19 represents the cost of assets that cannot be readily converted to cash such as real and personal property, inventory and mortgages due from local unions.

UNION BUILDING CORPORATION

The Union Building Corporation is the holding corporation for all properties owned by the International Union, UAW. During 2014, $1,221,839.85 was spent on the acquisition, development and capital improvement of UAW-owned properties. In addition, property valued at $30,000.00 was transferred to UBC from closed local unions. UBC disposed of property with a book value of $12,639,162.64 during 2014.

ORGANIZATIONAL   EXPENDITURES

Organizational Expenditures amounted to $16,273,605.16 during 2014. Our Union continues to work on bargaining gains across all sectors of UAW represented workplaces: Aerospace, Higher Education, Parts & Suppliers, Health Care, Technical Office & Professional, Insurance, Ag-Imp, Heavy Truck, Gaming, Transnational, Big 3, and Public Sector.

FUND TRANSFERS

Periodically, it becomes necessary to transfer funds from the General Fund to other Funds in order to eliminate deficits and establish working balances.  During 2014, $8,500,000.00 was transferred from the General Fund to the Citizenship Fund, and the General Fund also transferred $1,690,325.23 to the Education Fund, $290,000.00 to the Civil and Human Rights Fund and $107,588.99 was transferred to the Regional Activities Fund.

REALLOCATION OF PER CAPITA DUES
Of the total dues that Local Unions collect each month from members, a portion is remitted to the International Secretary- Treasurer. The dues collected will be allocated between the Local Union and the International Union UAW General Fund and the Strike and Defense Fund as show in the table below. The remaining one half (.05) hour of dues income (or .29%) shall be allocated entirely to the International Union-UAW Strike and Defense Fund.

*Both Local Unions and the General Fund are eligible for a dues rebate from the Strike and Defense Fund. If the Strike and Defense Fund balance falls below $500 million, all rebates are suspended until the fund balance exceeds $550 million.

Public Sector:

Public sector members generally do not have the right to strike. The allocation of the first two hours (or .832%) will be allocated 45.7 to the International Union, UAW General Fund and 53.3% to the Local Union.

The remaining one half (.05) hour of dues income (or .263%) shall be allocated entirely to the International Union UAW Strike and Defense Fund.

Private and Public Sector:

A portion of each member’s monthly dues allocated to the General Fund is distributed among several other activities/funds on a monthly basis. Each amount is expended only for the designated programs or activities. The allocation is as follows:

 

Communications $0.05
Civil and Human Rights Fund 0.01
Education Fund 0.03
Recreation Fund 0.01
Citizenship Fund 0.05
Retired Workers Fund 0.01

In addition, both the Local Unions and the General Fund are eligible for an additional rebate from the Strike and Defense Fund referred to as the “13th check”.

Each month beginning July 1, 2006, the amount of actual strike assistance benefits (weekly benefits and medical costs) are compared to 5% of total dues. To the extent that the actual strike assistance benefits are less than 5% of dues for the month, the excess is accumulated for the 13th check rebate. In any month which the actual strike assistance benefits exceed the 5% of dues, no additional amount will be accumulated. In April of the following calendar year, the accumulated total 13th check rebate from the preceding year is rebated to Local Unions and the General Fund in the same proportion as dues allocation after rebates.

STRIKE AND DEFENSE FUND

Strike and Defense Fund Total Resources amounted to $590,224,988.12 as of December 31, 2014.

Income to the Strike and Defense Fund amounted to $18,349,088.37 during 2014. A breakdown of income by sources follows:

 

 

 

 

 

Expenditures of the Strike and Defense Fund for 2014 amounted to $17,842,804.69. A breakdown of these expenditures by Region is contained in this report. During 2014, strike assistance was provided to 404 members of our Union.

In 2014, the Strike and Defense Fund also made transfers to the following funds: OEC Fund $7,664.65, General Fund $37,141,293.01 and Regional Activities Fund $15,615.14. These transfers were to support specific purposes or projects in accordance with Article 16, Section 14 of the Constitution.

Below is a comparison of the Strike and Defense Fund Net Resources as of December 31, 2014 and the preceding year-end.

ORGANIZATION, EDUCATION AND COMMUNICATION (OEC) FUND

By action of the delegates to the 1980 Constitutional Convention, the Constitution was amended to establish the Organization, Education and Communication (OEC) Fund.  In accordance with Article 16, Section 14, the OEC Fund’s primary source of income is from earnings on investments. Under the Constitution, the OEC may receive up to 75 percent of the interest and dividends received by the International Strike Assistance Fund to be expended, as authorized by the International Executive Board, for specific organization, education and communication programs.

The OEC Fund received $11,571,674.34 from interest received on Strike and Defense Fund investments during 2014. Expenditures (excluding transfers) from this Fund amounted to $4,394,720.15.

The following monies were transferred from the Organization, Education and Communication Fund during the year ended December 31, 2014 to offset organization, education and communication expenses:

EMERGENCY OPERATIONS FUND

This fund had a balance of $114,625,783.22 as of December 31, 2014.

By actions of the 33rd Constitutional Convention in June 2002, the Emergency Operations Fund was established. The assets of the Emergency Operations Fund, including accrued interest and earnings on investments, shall be available to finance operations of the International Union in the event Operating Fund resources are insufficient to sustain operations due to the effects of a protracted or expensive strike, a series of strikes, or other events posing a serious threat to the economic viability of the International Union

RETIRED WORKERS FUND

This Fund had a balance of $14,270,853.86 (which includes the Regions’ 25 percent share of each retiree’s dues dollar) as of December 31, 2014. Local Unions received $3,153,038.20 for their retiree chapters. There were approximately 570,198 retired members as of December 31, 2014.

FAMILY EDUCATION CENTER (FEC) FUND

When it was originally established in 1968, the FEC Fund included the Family Education Center Department, which formulates and implements programs at Family Education Centers for the education and training of UAW members and their families through participation in the Family Education Scholarship Program.

Over the years, the structure and funding of the Family Education Center in Black Lake and the Pat Greathouse Center in Region 4 have changed. The FEC no longer hasa regular source of income and many of the expenses associated with the Family Education Centers have been charged to other Funds.

Effective January 1, 2003, the UAW established Union Building Education, Inc. (UBE), a 100 percent-owned subsidiary corporation of the International Union, UAW, for the purpose of operating the Family Education Center in Black Lake. UBE collects income and pays expenses associated with the programs at Black Lake. The International Executive Board is authorized to transfer money from the OEC Fund, as necessary, to help supplement the cost of education activities at the Family Education Center.

As of December 31, 2014, the Family Education Center Fund had a balance of $302,658.82.

DUES

The dues structure has resulted in average monthly dues of $41.88 for 2014, compared with $42.33 for 2013.

MEMBERSHIP

The average dues-paying membership for calendar year 2014 was 400,954 compared to 382,789 in 2013, an increase of 18,165 members.

IN SUMMARY

In summary, the UAW’s financial condition remains strong. We continue to make difficult financial decisions in response to the challenges presented during these extremely difficult times for our members and the organization. I wish to thank my fellow Officers, Board Members, Staff Members and Office Employees for their cooperation and commitment to the financial stewardship of this great union.

Respectfully submitted,

Gary Casteel

International   Secretary-Treasurer