GM Sued By UAW For $450m Delphi VEBA Shortfall
As if to confirm that GM’s benefit obligation situation could actually be worse than today’s GAO report lets on, Automotive News [sub] is reporting that the UAW has sued GM over $450m in unfunded healthcare obligations for Delphi retirees. GM promised to fund a $450m Voluntary Employee Benefit Association for Delphi retirees in 2007, and Delphi’s bankruptcy court confirmed the commitment in last October. But, according to the UAW suit:
the UAW made a written demand that the company honor its contractual obligation to make the foregoing payment [last October… but] that UAW demand was rejected and since that time the company has failed and refused to make the contractually required payment.
That obligation apparently was not voided by GM’s bankruptcy, although The General’s spokesfolks have yet to officially comment on the UAW’s suit.
Adding another nearly half-billion dollars in Delphi VEBA costs doesn’t make a huge difference in light of these giant looming obligations, but it’s just one more cash suck that will weaken GM at a time when it needs to conserve cash on hand for these future outlays. Not to mention the necessary investments in new products, rescues of struggling overseas divisions in Germany and Korea, and maintaining the incentives that have been necessary to achieve current volume levels. To use the parlance of our elected leaders, a billion here, a billion there, soon you’re talking about real money.
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- ToolGuy I was challenged by Tim's incisive opinion, but thankfully Jeff's multiple vanilla truisms have set me straight. Or something. 😉
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- SCE to AUX Sure, give them everything they want, and more. Let them decide how long they keep their jobs and their plant, until both go away.
- SCE to AUX Range only matters if you need more of it - just like towing capacity in trucks.I have a short-range EV and still manage to put 1000 miles/month on it, because the car is perfectly suited to my use case.There is no such thing as one-size-fits all with vehicles.
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Life is a never ending series of 'one time charges'. At the end of the P&L all that matters is if you are positive or negative. I'd love to GM be positive. I want my money back.
You guys really think Ford, Visteon, and their contracts with the UAW are any better? Really?