Word: trusted
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Dates: during 2000-2009
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...filed with the Securities and Exchange Commission, details the company's slide toward insolvency, indicating GM had only $16.9 billion in ready cash reserves in place as of Sept. 30. Buried in the same voluminous report is a note indicating that GM has tucked away another $13.5 billion, in trust, to pay for health care for current and future blue-collar retirees covered by labor contracts with the United Auto Workers...
...spokeswoman Renee Rashid-Merem says the money is kept separate from the company's cash reserves under an agreement approved by the U.S. District Court in Detroit, which resulted from a "friendly" lawsuit that was part of the process that created the trust. The money can't be used for anything other than retiree health care. "We can't access it," she says...
...stretching the financial reserves of the domestic companies. By 2020, GM, which has the largest number of retired employees, will have transferred some $23 billion to the new Voluntary Employee Benefit Association (VEBA), created by the contract. (That amount includes the $13.5 billion GM has already injected into the trust, plus another $9.5 billion yet to be contributed.) Ford owes $13.6 billion to its VEBA, and Chrysler, which doesn't make its finances public, owes between $6 billion and $9 billion to its new retiree-health-care trust...
...health-care benefits have become more important, he says. "More than two-thirds of workers taking early retirement aren't eligible for Medicare. A lot of them didn't even want to retire," he says. UAW president Ron Gettelfinger said in the fall of 2007 that the VEBA trusts would protect the health care of retirees and eligible dependents for the next 80 years. However, that always depended on the health of the company. The promise is now suspect, says Stephen Diamond, an associate professor of law at Santa Clara University in California who has studied the auto-industry VEBAs...
...less inspiring. In other words, it will be all stick and no carrot. It's hard to say if anyone else would have been able to persuade the union to trade away tenure for cash bonuses, but Rhee's sometimes dismissive attitude made it harder for some teachers to trust...