GM Adds to Its Debt Mountain to Fund UAW VEBA
As we chronicled in GM Death Watch 165, details of the new $33b – $36.5b GM – United Auto Workers (UAW) health care VEBA (Voluntary Employees Beneficiary Association) are beginning to emerge. That said, neither this site nor the 600k+ UAW workers whose health care depends on this trust know the timing or amounts of GM's contributions to the fund. While we await that info, The Detroit Free Press reports that GM's raising money to pay into this Mother of All Health Care Trusts. Regulatory documents reveal that GM has taken on an additional… wait for it… $8.39 billion in debt. The Freep breaks it down to "4.37b in 6.75% bonds, due in December 2012 and convertible into GM shares, and a $4.02 billion, 9% short-term note." As a quick reminder, GM's interest payments on its current debt burden are $2.9b per year. Again, we don't know how much more cash GM will need to fund the VEBA, and when they'll need it.