General Motors Might Have To Reduce, Delay Expenditures To Establish Voluntary Employees’ Beneficiary Association
General Motors might have to reduce or delay planned expenditures in some areas to obtain the funds required to establish a voluntary employees' beneficiary association, according to an annual report filed on Thursday with the Securities and Exchange Commission, the AP/Detroit Free Press reports.The establishment of the VEBA served as a "key feature" in the four-year contract that GM signed with the United Auto Workers last year, according to the AP/Free Press. Under the contract, GM agreed to contribute as much as $33.7 billion to the VEBA, which will reduce retiree health benefit liabilities for the company by about $46.7 billion. GM must contribute about $25 billion in a limited period of time.
GM officials said that the company might not have the ability to obtain the funds required to establish the VEBA "on terms that are consistent with our business plans" and might "have to delay or reduce other planned expenditures" as a result (Krisher, AP/Detroit Free Press, 2/28). This is part of the Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
