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GM, Chrysler Retirees to Regain Some Key Benefits

Dental, vision care on list, according to union.

by on Sep.23, 2011

GM and Chrysler retirees will get some of their health care cuts restored in 2012.

Though they were largely left out when General Motors and the United Auto Workers Union hammered out a new 4-year contract last week it looks like retirees at GM – as well as Chrysler – may have something to cheer about after all.

They will see a restoration of some of the medical benefits they lost as part of earlier concessions made to help the two automakers survive their 2009 bankruptcies, according to a posting made by a UAW union local on its Facebook page.

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GM and Chrysler retirees have had to pay for their own vision and dental care for the last two years but will now get at least some of that coverage restored, according to the letter from the director of care and benefit management for the so-called VEBA program established jointly by the UAW and the makers to take over retiree health care.

The additional coverage appears limited, however, the restored vision care allowing for exams every other year.


GM Slashes Another $4 Bil In Debt

Maker moves to cover under-funded pension programs.

by on Dec.02, 2010

GM moving to put its financial house in order, says CFO Liddell.

General Motors Company has contributed $4 billion to its long-underfunded hourly and salaried pension plans in the United States.
Chris Liddell, GM vice chairman and chief financial officer, said $2.7 billion was contributed to the hourly plan and another $1.3 billion to the salaried plan.

The $4 billion contribution was another step towards putting the company’s financial house in order. GM’s U.S. pension plans currently provide benefits to approximately 688,000 participants, said Liddell.

“This pension contribution puts us another step closer to our goal of fully funding our pension plans and achieving minimal debt. With a healthy balance sheet, a lower cost structure and focus on revenue generation, we continue to put in place the fundamentals for sustainable success,” Liddell said.

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All of the company’s U.S. pension plans were, as of December 31, 2009 underfunded in total by $17.1 billion.  The company will next re-measure its U.S. pension plans at year end 2010 and their funded status will be included in the 2010 Form 10-K.

The pension liabilities were one of the key debts that remained after GM completed its bankruptcy, last year.


UAW To Get Big Chunk of New GM Stock

Shares will prop up retiree health care trust.

by on Oct.14, 2010

The UAW gets approval to fund its retiree health care program with new GM stock.

While specifics of General Motors planned IPO have yet to be released, it appears the company’s retirees will wind up owning an even bigger chunk than before.

The U.S. Labor Department has given the go-ahead for GM to fund the United Auto Workers Union’s retiree health care trust fund, a so-called VEBA, with a mix of warrants, debt, and both common and preferred stock.

The decision could wind up making the UAW the largest shareholder in GM once the government eventually sells off its more than 60% stake in the automaker.

The move also helps avoid a situation in which the health car trust, known formally as a Voluntary Employee Beneficiary Association, might go bust and need a federal bailout.  The GM VEBA was established two years before the maker’s 2009 bankruptcy as part of an effort to shift health care costs off company books.  But GM’s Chapter 11 filing raised serious concerns about its viability.

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Without the Labor Dept. waiver, the UAW fund would not have been allowed to hold more than 10% of the “new” GM’s stock.  It will now be permitted to go up to 18% in common shares, while also holding up to 2.5% in GM warrants.

The VEBA will also hold $6.5 billion in preferred stock, along with a $2.5 billion note.