Freep:UAW health fund looks promising [Archive] - Ford Inside News Community

: Freep:UAW health fund looks promising

07-17-2007, 07:53 AM (

July 17, 2007
This is the year that something's got to give on health care in the Detroit-based auto industry. The car companies and the United Auto Workers both know that as they prepare for the start this week of the most important contract talks of modern times.
The industry has to keep cutting costs to remain competitive; the UAW has to protect its members. The proverbial middle ground may be something called VEBA -- voluntary employee benefits association.
The UAW has some recent, smaller-scale experience with the concept, which GM is reported ready to lay on the table. In a VEBA, the company essentially pours money into a fund for the union to administer to cover its retirees' health care. For a one-time payment, the company sheds its obligation. On the upside for the UAW, such a fund could be maintained even in the event of a company bankruptcy. But the key will be coming to terms on the size of the initial company investment to ensure the fund's long-term solvency.
As part of its plan to emerge from bankruptcy, auto parts maker Dana Corp. this month put $800 million into a UAW-controlled trust fund for retiree health care, projecting savings as a result of more than $100 million a year. Similar deals have been worked out in the rubber and steel industries. None, however, has yet established the kind of long-term track record the UAW would like to see before going down this path.

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07-17-2007, 08:12 AM
I hope UAW someday helps with retirement too. they could buy stock in these companies. Have ron on the board as a controlling director.

Man union bosses remind me of pigs on the book Animal farm.