UAW to set up strict controls on VEBA

[steinravnik]

DETROIT (Reuters) - The United Auto Workers union is establishing clear rules for a massive new health-care trust intended to guarantee the independence and solvency of a $56 billion fund that will be set up by the Detroit automakers.

Continued...
http://biz.yahoo.com/rb/071121/autos...veba.html?.v=3

[dratnol]

It is going to be real interesting to see how this plays out. Now the UAW will be held accountable instead of GM.

[Hurricane]

The UAW could become the single biggest shareholder in Ford Motor Co (NYSE:F - News) and General Motors Corp (NYSE:GM - News) since the health-care trust is being financed partly through convertible debt.

Gettelfinger said it was not clear if the VEBA trustees would make the decision alone or in consultation with the UAW about whether to convert the debt to shares equivalent to as much as 16 percent of GM stock and 15 percent of Ford stock.

With the sizable potential investment in the two automakers, Gettelfinger said the union had considered the question of whether it should have representation on the boards of the automakers.

"We discussed that somewhat," he said. "I think, down the road, board seats will eventually come about."

Analysts have said the UAW could wield a big stick as an investor, especially on issues already on its agenda, including health-care costs, corporate governance, executive compensation and trade.

HOLY COW!!!

I think I see the four horsemen of the apocalypse.....!

[goochman]

Wonder if the Viagra tab is going to be cut off

[MechEng]

Originally Posted by Hurricane

HOLY COW!!!

I think I see the four horsemen of the apocalypse.....!

I think that in the end this could be good for the UAW.

Here in Ontario the Ontario Teachers Federation Union has a multi billion dollar pension fund that is used to invest (and in some cases run) many other companies. And in the end this has made the OTF a better union.

http://en.wikipedia.org/wiki/Ontario...7_Pension_Plan

[member12]

For 56 billion the UAW can buy GM.

That is expensive.

Is anyone else a little concerned that this is one helluva tab?

[eaton53]

Originally Posted by member12

Is anyone else a little concerned that this is one helluva tab?

Now you know how big of a hook GM has wiggled off.

[Hurricane]

Originally Posted by MechEng

I think that in the end this could be good for the UAW.

Here in Ontario the Ontario Teachers Federation Union has a multi billion dollar pension fund that is used to invest (and in some cases run) many other companies. And in the end this has made the OTF a better union.

http://en.wikipedia.org/wiki/Ontario...7_Pension_Plan

I am hopeful that this is a good move for both the union and the company.....I am just a bit shocked in that it seems like a rather interesting turn of events!

Strange times we live in!

[newclasshero]

The Union will have some serious business clout if/when they start to make wise investments with all this money. It will be interesting to see what happens and how they handle it.

[EldoFan]

Originally Posted by goochman

Wonder if the Viagra tab is going to be cut off

I was wondering the same thing....

[jbernie]

Originally Posted by member12

For 56 billion the UAW can buy GM.

That is expensive.

Is anyone else a little concerned that this is one helluva tab?

Why not a controlling stake in Toyota and force them to unionize?

Actually, my first thought would be for the union to reduce the stake in the automakers and invest in other sectors of the economy.

Even though you can say that having only automaker stock reminds them to be responsible, outside factors such as a prolonged recession and stuff way beyond their control can do a lot to hurt the value of the fund.

[tgagneguam]

Originally Posted by member12

For 56 billion the UAW can buy GM...

Funny, member12, I've never thought about that. Wouldn't that just be weird irony?

[steverino]

Originally Posted by jbernie

Why not a controlling stake in Toyota and force them to unionize?

Actually, my first thought would be for the union to reduce the stake in the automakers and invest in other sectors of the economy.

Even though you can say that having only automaker stock reminds them to be responsible, outside factors such as a prolonged recession and stuff way beyond their control can do a lot to hurt the value of the fund.

That will be the first move for the investment firm(s) that manages the fund. Dump the auto stocks and ride the next Google

[johnny smallblock]

He said the Detroit-based union would draw the line on any lavish spending of workers' money by either the fund managers or the trustees.

"We will have administrative costs, but we are not going to have trustees holding meetings in California," Gettelfinger said. "This is not going to be a lavish party."

Good move, Gettlefinger!

I don't know what will happen, but what will all the UAW-haters say if it turns out the UAW can run a better, more efficient system than GM?

[CaptainDan]

I think this infusion of money/stocks won't result in any "ownership" or a huge potential investment fund for the UAW. I believe the money is spoken for. Isn't there some expensive healthcare for their members that this is supposed to pay for? Hence the "strict controls" to avoid squandering the money on "investments".