Kia - Automobiles, Car Pictures

Automobiles, Car Pictures, Car review, Car component, car and girl

Under the tentative contract, GM would put its retiree health care obligations into a trust to be managed by the UAW. The trust is known as a voluntary employees beneficiary association, or VEBA. GM has approximately $51 billion in retiree debt but isn't required to put the entire amount into the VEBA Under the contract, GM would put $24.1 billion into the VEBA in January 2008 and pay an additional $5.4 billion to cover retirees' health care costs until the VEBA takes over in 2010. GM also would contribute a $4.37 billion note convertible to GM stock and would make a maximum of $1.6 billion in payments to the VEBA anytime the fund's level is insufficient to provide benefits for at least 25 years. The people briefed on the talks said GM's formula might have to be changed to meet Ford's and Chrysler's needs. The VEBA benefits GM more than Ford and Chrysler because GM has the most retirees and surviving spouses, at nearly 340,000. Ford has 124,000 and Chrysler has 78,000, according to the UAW. GM also has an older work force with more employees on the verge of retirement. According to the UAW, 63.5 per cent of GM workers will be eligible to retire in five years, compared to a third of the work forces at both Ford and Chrysler.