Ford and the United Auto Workers (UAW) have come to terms on a tentative deal on payments to retiree health care fund, according to reports.
This follows closely a deal last week between the UAW and Ford to create parity between Ford worker's salaries and Japanese rivals.
This is, however, a tentative agreement. It would have to be ratified by rank-and-file members of the union. It is also unclear, at this time, just what Ford and the UAW have agreed to.
What is clear, however, is that Ford retirees do not want changes to their health care, and that places any sort of deal in the questionable category.
Mary Briscoe, 72, a Ford retiree who lives in Charlestown, Indiana said:
"The health-care benefits take care of all my problems. I do not want to lose any of it."
When the UAW and automakers negotiated their 2007 contract, the UAW agreed to absorb liability for retiree health care through the creation of a Voluntary Employee Beneficiary Association trust, or VEBA.
In exchange, the Big Three automakers (GM, Ford, and Chrysler)agreed to deposit $46.1 billion into the VEBA. But now the UAW is being asked to accept company stock as partial payment for setting up the VEBA.
One has to wonder if how the UAW is to manage the VEBA with the stock market in such disarray; it is probably true that the assumption was that mutual funds and the like would continue to grow.
Given that, why would the rank-and-file want to take carmaker stock, declining as they are?
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