DETROIT -- The UAWs trust fund for retiree health care would get a 17.5 percent stake in a reorganized General Motors under a new labor agreement with the company, union officials were told today, according to news reports.
The agreement also calls for GM to place $10 billion in assets into the UAWs Voluntary Employee Beneficiary Association, or VEBA. The fund is owed about $20 billion to cover the future health care costs of GM union retirees and their families.
At 17.5 percent, the UAWs stake would be less than half the 39 percent stake originally considered as part of GMs potential reorganization. The U.S. Treasury, which has kept GM afloat with $19.4 billion in loans so far, is expected to take a controlling stake in the company.
The automaker faces a June 1 deadline to reach agreements with the union and with bondholders -- or it will probably file for Chapter 11 bankruptcy protection, GM executives have said.