Is the General Motors Contract a Good Deal?

Houston Chronicle business columnist Loren Steffy, historically one of the first in Houston to sound the alarm about Enron's bizarre business practices, has a clever column today questioning whether the agreement between GM and the UAW to offload GM's health care costs into a trust managed by the union will actually work.

The column is entitled The GM settlement boils down to a matter of trust. It notes that Caterpillar set up a very similar arrangement in Peoria, but it ran out of money in six years, and Caterpillar's retirees are now having to pay a big chunck of medical costs themselves. GM hopes that the $24 billion they're putting into the UAW trust upfront, plus a few billion more in the next few years, will be enough to keep the trust solvent. Recalling the bad calculations and bad outcome when GM sold off its Delphi division, Steffy is very skeptical.

The clever part of the column is that Steffy pretends he is interviewing Howie Makem, the Quality Cat mascot that GM had walk through its Flint, Michigan plant at random intervals in the 1980s, weaing a long red cape with a giant Q for Quality, and purring slogans like "Quality is the backbone of good workmanship" and "Safety is safe" to bewildered workers. The character is featured with glee in Ben Hamper's 1992 book Rivethead: Tales from the Assembly Line.

Evidently GM had a contest to name the cat. Howie Makem won out over the likes of Tuna Meowt, Roger's Pussy, and Wanda Kwit. Howie, of course, is gung ho for the health care trust and thinks it will be a resounding success.

I'd love to post a picture of the Quality Cat. But apparently GM was quite successful in preventing one from ever being published.