DETROIT (Bloomberg) -- The trust funds representing UAW retirees from General Motors, Ford, and Chrysler all posted gains in their total assets in 2012, bolstering the health-care funds for former workers.
The three trust funds, known as VEBAs, finished the year with a combined $58.8 billion in assets. They spent a total of $4.16 billion on medical benefits last year and paid administrative fees totaling almost $284 million.
The largest of the three, the GM UAW retiree health-care trust, ended 2012 with almost $30 billion in net assets, 5.8 percent increase from the beginning of the year, according to records filed with the U.S. Department of Labor on Oct. 11. The trust completed 2012 with a net income of $1.65 billion compared with a $4.7 billion loss in 2011.
The GM VEBA paid $2.48 billion in benefits and reported $170 million in administrative expenses.
In September, GM said it plans to buy back almost half of the trust’s preferred shares in the automaker for $3.2 billion.
The Ford UAW retiree health care trust ended 2012 with $15.9 billion in net assets, a 5.4 percent increase from the beginning of the year, according to its filing. The trust ended the year with net income of $806.8 million compared with a $973 million loss in 2011.
The Ford VEBA paid $1.05 billion in benefits and $75.8 million in administrative expenses.
Probably the most-watched of the three VEBAs, the UAW Chrysler Health Care Trust, said its net assets grew by 18 percent in 2012 to $10.3 billion, according to its 2012 financial statement. Almost $900 million of the gain resulted from an increase in the value it placed on its Chrysler stake.
Expenditures for benefits rose less than 0.1 percent to $631.1 million. The Chrysler trust’s administrative expenses were $38 million.
Profitable sales gains have continued this year while Fiat S.p.A. haggles with the trust over the price it must pay to merge with Chrysler.
While the union trust argues that the value of the stake has continued to rise, Sergio Marchionne, CEO of Chrysler and majority owner Fiat, has challenged those valuations, calling them too high. To break the standoff, Fiat filed for an initial public offering of Chrysler shares last month at the behest of the trust.
“The trust has to optimize this because they’re getting all they’re going to get and they have to support the health- care needs of a growing retirement base,” Richard Hilgert, an analyst with Morningstar Inc. in Chicago, said Monday in an interview. “They’re being good stewards of what they have to manage. They have to maximize the value.”
Marchionne valued the trust’s 41.5 percent stake at $1.7 billion in July, when the trust said it was worth $4.2 billion.
The trust, organized as voluntary employee beneficiary plan, or VEBA, said the value rose from about $2.7 billion at the start of last year.
Matt Wood, a spokesman for the trust, and Katie Merx, a Chrysler spokeswoman, declined to comment on the filing.
The trust received its stake in Chrysler as part of the automaker’s 2009 bankruptcy to help pay for the medical benefits of Chrysler’s union retirees.
The trust covered the medical benefits for 61,214 people at the end of 2012, according to its 2012 financial statement.
While Fiat has the right to buy the stake for about $6 billion, Marchionne wants to pay less. He said last month the trust “should buy a ticket for the lottery” if it wants $5 billion or more for its holding.
Chrysler’s value has climbed to $13.5 billion, UBS AG estimates, as industry wide U.S. light-vehicle sales this year are on track to reach the best level since 2007. The UBS estimate would mean the VEBA’s stake is worth $5.6 billion.
Chrysler sales in the U.S. have risen for 3 1/2 years as its added nameplates such as the Dodge Dart and Fiat 500 while revamping its Ram pickups and Jeep Grand Cherokee and Dodge Durango SUVs.