A United Auto Worker retiree medical fund created to reduce healthcare costs and increase services for more than 700,000 people reported a $20.7 billion difference between assets and future liabilities, Bloomberg reported Wednesday (via Automotive News). The shortfall increased by more than $16 billion over the last report.
A similar system proposed for Fiat Chrysler Automobiles workers in the union’s first proposed contract — which was rejected by workers nearly 2-to-1 — was scrapped in the second contract.
Accounting for future inflation and longer average lifespan are to blame for the increased shortfall, according to the report. (Read More…)
Well, we’ve been here before… about this time last year, to be exact. The Freep reports that Chrysler, which had to quit leasing for much of last year due to falling resale values and the credit crunch, is reinstating subsidized leasing for its 26,000 qualifying retirees. Under the terms of the plan, retirees could lease up to two 2010 Chrysler, Dodge or Jeep products with no down payment and free scheduled maintenance. The 36-month leases run from December 9 through June 30, 2010. According to the Freep, retirees will pay $100 per month less on average than Chrysler employees who have access to two-year leases. GMAC, which is financing the leases, is set to receive another government bailout of “less than” $5.6b on top of the $13.5b it has already received from the TARP program.