Ford Transfers Health Care Liabilities To Union Trust
Dow Jones Newswires/The Wall Street Journal: "Ford Motor Co. said Monday it completed the transfer of its union retiree health-care liabilities to the United Auto Workers Retiree Medical Benefits Trust as part of a court-approved settlement agreement." The transfer "removed a substantial health care liability from the Detroit auto maker's balance sheet and significantly reduced its health care expenses." Ford also prepaid $500 million of the debt it owes to the trust (Bennett and Shwiff, 1/4).Bloomberg/Detroit Free Press: "The amount was in addition to scheduled Dec. 31 payments of $2.01 billion on notes that went to the fund, the automaker said Monday." The trust received a total of $17.3 billion from Ford (1/5).
Reuters: "The VEBA trust was established as part of a sweeping 2007 agreement by Ford and other U.S. automakers to shift a combined $80 billion health care liability from their balance sheets. In exchange for settling that debt, General Motors Co, Ford and Chrysler collectively pledged about $48 billion to the union-aligned trust fund - which would cover up to 675,000 retirees and dependents" (Kim, 1/4).
The Associated Press reports that the $17.3 billion in notes will add $7 billion of debt to Ford's balance sheet (1/4). This is part of the Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
