Report of the Secretary-Treasurer to the 37th UAW Constitutional Convention 1

Transcription

1 Report of the Secretary-Treasurer to the 37th UAW Constitutional Convention 1

2 37th UAW Constitutional Convention Report of the International Board of Trustees Dear Sisters and Brothers, During the period between the 36th UAW Constitutional Convention held in June 2014 and the present, the International Board of Trustees has commissioned semi-annual audits of the books and records of the International Secretary-Treasurer by a certified public accountant, as required by the UAW Constitution. Your trustees have studied these audits carefully and found that they present a clear, comprehensive and detailed record of our union s finances. In light of the continuing economic turmoil in our union s traditional core industries, we believe it is essential for our union to maintain a disciplined financial course. We commend the officers and the International Executive Board members for their continued vigilance over the financial affairs of our union. We also want to thank International Secretary-Treasurer Gary Casteel and his staff for their assistance and cooperation throughout the last four years. Respectfully submitted, Michael A. Watier Mark Wunderlin Phyllis Blust Chairperson Trustee Trustee Report of the Secretary-Treasurer to the 37 th UAW Constitutional Convention 2

3 Dear Delegates, As we gather at the 37th Constitutional Convention, the state of our union is strong. Prior to the 36th UAW Constitutional Convention in 2014, like most organizations tied to the auto industry and manufacturing, we were trying to find our footing after the Great Recession. While the recession started to ease, the intense pressure on our union s finances did not. By 2017, the trend had noticeably reversed, and UAW membership has grown by more than 75,000 members since the auto industry recession in By the end of 2017, our membership grew to 430,871. Another factor contributing to our growth and stability was a commitment to tighten our finances. At the 2014 convention, we made a commitment to the delegates and the rest of our members that we would do the hard work and get our financial house in order. We rolled up our sleeves and developed a solid financial plan. We re proud to say that with your help, fiscal year 2017 was a successful continuation of that plan. We ve continued to streamline processes and look for savings wherever we can. For three straight years our overall funds were balanced for the first time in memory. As you will see in the following pages, our financial outlook heading into the 37th UAW Constitutional Convention is much brighter than it was when we headed into the previous convention. Change is not easy or painless, but we remained diligent about the commitment we made to our members. Together, we forged a healthy strategy for getting our financial house in order and establishing a strong foundation for our union s long-term financial stability. The International Executive Board would like to thank the International staff, clerical, regional and local leadership and, most important, the rank-and-file for what we ve achieved together. Fiscal integrity and transparency remain our highest goals and most sacred promise to our mission and membership. Every six months, the International Union s books and records undergo an independent audit, copies of which are available to every local union on the Local Union Information System (LUIS). Financial reports are presented to the International Executive Board, and every member can read an audit summary when it is published each year in the January/ February edition of Solidarity Magazine. The following report is a summary of the UAW s assets and finances, including other essential activities of our union during the last four years. In solidarity, Gary Casteel International Secretary-Treasurer Report of the Secretary-Treasurer to the 37 th UAW Constitutional Convention 3

4 T OVERVIEW OF UAW FINANCIAL STRUCTURE he International Union s financial structure is based on a system of internal funds. The 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 individual funds and otherwise ensuring that expenditures are made in accordance with the Constitution. Within each fund, the union keeps track of the income and expenses associated with the specific programs and activities of the fund. The union has a total of 11 funds: six operating funds, the Strike and Defense Fund and four other funds. Operating Funds General Fund Education Fund Citizenship Fund Civil and Human Rights Fund Recreation Fund Family Education Center Fund Strike and Defense Fund Other Funds Emergency Operations Fund Regional Activities Fund Retired Workers Fund Councils Fund A summary of each of the union s eleven funds begins on Page 9 of this report. The tables on Pages 6, 7 and 8 summarize the resources of each fund as of December 31, Before reviewing the tables, it may be helpful to understand some of the accounting-specific terms used in the tables. OPERATING FUNDS The International Union has six funds, which together are considered our Operating Funds. These are: Citizenship Fund Civil and Human Rights Fund Education Fund Family Education Center Fund General Fund Recreation Fund Report of the Secretary-Treasurer to the 37 th UAW Constitutional Convention 4

5 OPERATING FUNDS The General Fund is the largest of the operating funds and the Constitution imposes no specific restrictions on its expenditures. The five remaining funds were established by convention action and the Constitution sets forth their specific purpose and the required objective of their expenditures. These five funds are categorized as operating funds because each receives regular transfers from the General Fund to ensure sufficient resources to implement the programs of that fund. STRIKE AND DEFENSE FUND The Strike and Defense Fund is by far the union s largest fund. This fund is used for the specific purposes set forth in Article 16, Section 11 of the Constitution. OTHER FUNDS The International Union has four other funds. These funds are maintained in accordance with the specific guidelines set forth in the Constitution, or with approval of the International Executive Board, officers, or regional directors. Each of these funds ASSETS Assets include cash, accounts receivable, mortgages due from local unions, the cost of investment securities, real and personal property, and inventory held for resale. FUND BALANCE Fund Balance is the difference between total assets and total liabilities. The International Union s total fund balance is a combination of the fund balances of each of the 11 funds. LIABILITIES is self-sufficient, meaning the fund takes in enough income to cover its expenses. Liabilities are amounts owed to others and include a note payable to the UAW Retirees Health Care Trust (VEBA Note), amounts due to affiliates, and amounts owed to local unions and the International Union s General Fund for the 13th Check Rebate. Report of the Secretary-Treasurer to the 37 th UAW Constitutional Convention 5

6 UAW OPERATING FUNDS This table summarizes total assets, liabilities and fund balances for each of the Union's operating funds as of Dec. 31, Total assets include cash andcash equivalents, which represent cash on hand and the cost of investment securities that can be readily converted to cash. The total amount of cash and cash equivalents is the amount of assets available to meet the day-to-day operating expenses of the fund. Real and personal property and other assets include those items that cannot be readily converted to cash, such as land, buildings, equipment, inventories and receivables. Total liabilities include a note payable to the UAW Retirees Health Care Trust (VEBA Note) and amounts due to affiliates. Operating Funds - Dec. 31, 2017 General OEC Citizenship Education Civil & Human Rights Recreation FEC Total Operating Fund Fund Fund Fund Fund Fund Fund Funds Assets Cash & Cash Equivalents $ 67,529,380 $ - $ 23,341 $ 16,330 $ 18,479 $ 872,060 $ 570,873 $ 69,030,464 Real & Personal Property 123,969, ,969,680 Other Assets 18,927, ,927,008 Total Assets $ 210,426,068 $ - $ 23,341 $ 16,330 $ 18,479 $ 872,060 $ 570,873 $ 211,927,152 Less Total Liabilities $ 117,916,196 $ - $ - $ - $ - $ - $ - $ 117,916,196 Fund Balance $ 92,509,872 $ - $ 23,341 $ 16,330 $ 18,479 $ 872,060 $ 570,873 $ 94,010,956 Cash & Cash Equivalents by fund 2017 $ 67,529,380 $ - $ 23,341 $ 16,330 $ 18,479 $ 872,060 $ 570,873 $ 69,030, ,762,506-10,408 5,432 15, ,893 19,967 56,678, ,699,386-23,068 19,877 12, , ,195 50,877, ,847,783-6,252 13,011 15, , ,659 46,988, ,688,608-7, ,893 77, ,075 92,896 20,727, ,047, ,894 30,484 13,008 9, , ,200 7,243, ,665,893 11,533,167 50,377 22,976 12, ,179 16,468 18,019, ,784,165 12,067,906 24,350 24,266 18, ,677 1,834 28,610,636 Report of the Secretary-Treasurer to the 37 th UAW Constitutional Convention 6

7 STRIKE AND DEFENSE FUND Report of the Secretary-Treasurer to the 37 th UAW Constitutional Convention 7

8 UAW - OTHER FUNDS This table summarizes total assets, liabilities and fund balance for each of the Union's other funds as of Dec. 31, Total assets include cash and cash equivalents, which represent cash on hand and the cost of investment securities that can be readily converted to cash. The total amount of cash and cash equivalents is the amount of assets available to satisfy expenses of the funds, subject to the guidelines set forth in the Constitution, or by the International Executive Board, Officers or Regional Directors. Other Funds - Dec. 31, 2017 Emergency Regional Operations Activities Retired Councils Fund Fund Workers Fund Fund Assets Cash & Cash Equivalents $ 34,334,228 $ 5,808,214 $ 17,135,974 $ 4,430,128 Total Assets $ 34,334,228 $ 5,808,214 $ 17,135,974 $ 4,430,128 Total Liabilities $ - $ - $ - $ - Fund Balance $ 34,334,228 $ 5,808,214 $ 17,135,974 $ 4,430,128 Cash & Cash Equivalents by fund 2017 $ 34,334,228 $ 5,808,214 $ 17,135,974 $ 4,430, ,713,295 3,891,416 16,421,746 3,970, ,178,736 3,987,134 15,540,517 3,842, ,625,783 3,154,258 14,293,854 5,539, ,373,100 3,566,753 15,435,763 4,896, ,554,407 4,035,412 15,521,418 4,254, ,969,596 3,830,423 13,655,829 4,068, ,910,585 4,037,868 12,991,751 5,882,191 Report of the Secretary-Treasurer to the 37 th UAW Constitutional Convention 8

9 SOURCES OF INCOME The International Union has two primary sources of income dues from members and earnings on investments. MEMBERSHIP A year-by-year summary of the average dues paying membership from 1936 through 2017 is set forth on page 13 of this report. Since the last convention, the average dues paying membership was: In addition, there was an average of 548,987 dues paying retired members as of Dec. 31, During the four-year period ended Dec. 31, 2017 our union organized more than 11,568 potential new members through elections, card checks and affiliations. The International Union received initiation fees from 43,094 members in 2017, 43,967 in 2016, 45,268 in 2015, and 39,833 in Newly organized members do not pay an initiation fee until a first contract is negotiated at their worksite. Initiation fees also include payments made by newly hired employees at worksites with an existing collective bargaining agreement. EARNINGS ON INVESTMENTS Earnings on investments include interest, dividends and realized gains from the sale of investment securities. Total earnings on investments from 2014 through 2017 are summarized below. SUMMARY OF FUNDS Below is a brief description of each of the union s 11 funds, its source of income, types of expenditures and fund balance as of Dec. 31, GENERAL FUND The General Fund handles the majority of financial transactions of the International Union. Its primary sources of income are from dues and earnings on investments. General Fund expenditures consist of the day-to-day costs of running our union, including salaries and benefits for the officers, board members, and the majority of staff, clerical and maintenance employees. General Fund expenditures also include expenses such as rent, utilities, property taxes and insurance, building maintenance, office supplies, printing, and postage. As of Dec. 31, 2017, the General Fund had total assets of $210,426,068 and total liabilities of $117,916,196, resulting in a General Fund balance of $92,509,872. Of that amount, $67,529,380 of the General Fund balance represents cash and cash equivalents, which are available to meet the day-to-day expenses of the fund. The remaining balance of the fund, $24,980,492, represents the cost of assets that cannot be readily converted to cash such as real and personal property and inventory. All real property owned by the International Union is held by the Union Building Corporation (UBC), which is a 100 percent owned subsidiary corporation of the International Union. CITIZENSHIP FUND The Citizenship Fund was established for the purpose of strengthening democracy by encouraging members and citizens to register and vote in community, state, and national elections. The fund is also used to carry on organizational and educational programs directed toward the achievement of an ever-higher understanding of citizenship responsibility and the need for active Report of the Secretary-Treasurer to the 37 th UAW Constitutional Convention 9

10 participation in the affairs of a free and democratic society. The Citizenship Fund receives five cents from each member s monthly dues and transfers from the General Fund, as necessary, to cover the costs of the activities described above. As of Dec. 31, 2017, the Citizenship Fund had a balance of $23,341. EDUCATION FUND The Education Fund includes the Education Department, which was established for the purpose of educating our members about labor history, labor issues, the objectives of the union and the challenges facing the union, its members and their families. The Education Fund receives three cents from each member s monthly dues and transfers from the General Fund, as necessary, to cover the costs of the activities described above. As of Dec. 31, 2017, the Education Fund had a balance of $16,330. CIVIL AND HUMAN RIGHTS FUND The Civil and Human Rights Fund finances the Civil and Human Rights Department which is charged with promoting the programs and activities of the International Union in support of fair employment practices and in opposition to all discriminatory practices in employment. The Civil and Human Rights Fund receives one cent from each member s monthly dues and transfers from the General Fund, as necessary, to cover the costs of the activities described above. As of Dec. 31, 2017, the Civil and Human Rights Fund had a balance of $18,479. RECREATION FUND The Recreation Fund finances the Recreation Department which is responsible for promoting recreational activities for our members. The Recreation Fund receives one cent from each member s monthly dues, registration fees for sponsored events, and transfers from the General Fund, as necessary, to cover the costs of recreational activities. As of Dec. 31, 2017, the Recreation Fund had a balance of $872,060. 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. Effective Jan. 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 UAW 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 General Fund, as necessary, to help supplement the cost of education activities at the Family Education Centers. As of Dec. 31, 2017, the Family Education Center Fund had a balance of $570,873. Report of the Secretary-Treasurer to the 37 th UAW Constitutional Convention 10

11 STRIKE AND DEFENSE FUND The Strike and Defense Fund s primary source of income is from strike dues remitted by local unions. Expenditures from the Strike and Defense Fund include strike benefits and insurance for striking members, expenses associated with targeted organizing efforts, local union rebates, and administration of the strike assistance program. The following table summarizes the income and expenditures of the Strike and Defense Fund for the four-year period covered by this report. By action of the 34th Constitutional Convention in June 2006, the International Executive Board has authority to make additional, limited withdrawals from the Strike and Defense Fund, not to exceed $60 million between any two consecutive Constitutional Conventions. Such withdrawals are permitted to support specific purposes or projects such as major organizing drives or other initiatives intended to increase UAW membership, strengthen the UAW s ability to bargain effectively and/or promote the interests of the membership and working people generally. As of Dec. 31, 2017, a total of $39,310,244 has been transferred from the $60 million allocated under Article 16, Section 11. EMERGENCY OPERATIONS FUND The Emergency Operations Fund was established by action of the 33rd Constitutional Convention in June The assets of the Emergency Operations Fund, including accrued interest and earnings on investments, are 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. In December 2015, $85,000,000 was transferred from the Emergency Operations Fund to the newly established VEBA Trust pursuant to Article 16, Section 33 of the Constitution. As of December 31, 2017, the Emergency Operations Fund had a balance of $34,334,228. Report of the Secretary-Treasurer to the 37 th UAW Constitutional Convention 11

12 RETIRED WORKERS FUND The Retired Workers Fund is used to promote and support programs benefiting retired members, including such programs of the International Union and Regional Retired Workers Councils. The Retired Workers Fund receives one cent from each member s monthly dues. The Constitution also provides for voluntary retired member dues that are currently $3 per member per month. Voluntary retiree dues are allocated as follows: International Retired Workers Fund 40% Regional Retired Workers Fund 25% Local Union Retired Workers Chapters 35% As of Dec. 31, 2017, the Retired Workers Fund had a balance of $17,135,974. Of that amount, $9,739,846 represents Regional Retired Workers Fund balances. COUNCILS FUND The Councils Fund includes National and Corporation Bargaining Councils (Article 20) and National and Regional Wage-Hour Councils (Article 22), which coordinate the demands of the individual council members and formulate policies in dealing with their employers and industries. Under the Constitution, local unions that participate in councils pay a per capita tax to the International Union. As of Dec. 31, 2017, the Councils Fund had a balance of $4,430,128. STAFF The following breakdown compares the number of International Union employees on the payroll at the end of the years 2014, 2015, 2016, and REGIONAL ACTIVITIES FUND The Regional Activities Fund includes funds raised through various events held in each region, which are used at the discretion of the regional director to promote the region and its local unions, and to educate members of the community about the union and its objectives. As of Dec. 31, 2017, the Regional Activities Fund had a balance of $5,808,214. Report of the Secretary-Treasurer to the 37 th UAW Constitutional Convention 12

13 AVERAGE DUES PAYING MEMBERSHIP 1936 THROUGH , ,168, , , ,326, , , ,402, , , ,403, , , ,472, , , ,530, , , ,485, , , ,264, , ,065, ,393, , , ,501, , , ,464, , , ,356, , , ,358, , , ,440, , ,018, ,499, , ,184, ,527, , ,197, ,357, , ,418, ,275, , ,239, ,151, , ,328, ,057, , ,320, ,123, , ,315, ,161, , ,026, ,106, , ,124, ,002, , ,136, , , ,001, , , ,073, , ,150, ,658 Report of the Secretary-Treasurer to the 37 th UAW Constitutional Convention 13

14 T he Secretary-Treasurer s responsibilities include, among others, the Auditing Department, Strike Assistance Department and Accounting Department. The following is a brief description of these departments and how each directly benefits our members. AUDITING The Auditing Department advises and assists local union financial officers in proper bookkeeping procedures, informs them of changes in the law and conducts audits and procedural surveys. The department also assists the International trustees in carrying out their semiannual audit of the International Union s finances, and maintains records on all UAW locals, past and present. The Auditing Department provides internal audit service to all UAW Local Unions, CAP Councils, PACs and other funds on a regular basis. During 2014, 2015, 2016 and 2017, the UAW auditing staff provided auditing service that produced 764 audit reports. The following is a breakdown of the local unions and other UAW organizations that were audited during this period: STRIKE ASSISTANCE The Strike Assistance Department ensures that members on strike receive strike benefits in a timely manner. The department works closely with local unions to establish relationships with government agencies and private social services that can help UAW members and their families during strikes. The department also helps arrange strike information classes at the local union level. Following is a year-by-year summary of strike assistance activity. ACCOUNTING The Accounting Department is responsible for the accounting of all receipts and disbursements of the International Union, as well as certain CAP/PAC receipts and disbursements. It handles the preparation of financial and government reports, including the Department of Labor LM-2 report and various federal and state election reports. Over the past four years, the Accounting Department has focused its efforts on providing streamlined, electronic resources to the International s employees and Local Unions, including implementation of the Local Union Information System (LUIS) for paying per capita taxes and reporting membership. Finally, the Secretary-Treasurer also has jurisdiction over the following: Building Maintenance Purchasing and Printing Skilled Trades Department Report of the Secretary-Treasurer to the 37 th UAW Constitutional Convention 14

15 To the Officers and International Executive Board Members, and the entire leadership and membership of our many local unions, please accept my deepest gratitude for your continued support and dedication to our union cause, and for the opportunity to serve. In solidarity, Gary Casteel International Secretary-Treasurer Report of the Secretary-Treasurer to the 37 th UAW Constitutional Convention 15

16 UAW.org twitter.com/uaw facebook.com/uaw.union Report of the Secretary-Treasurer to the 37th UAW Constitutional Convention 16