Friday, December 05, 2008


Auto Executives Come Back to DC to Request a Much-Needed LoanExecutives from General Motors Corp., Ford Motor Co. and Chrysler LLC made a second attempt on Thursday for federal assistance -- this time for $34 billion -- before the Senate. However, their encore appearance brought "fresh skepticism," according to the Associated Press. A hearing before the House is slated for today (Friday). United Auto Workers (UAW) leaders agreed to let the cash-starved automakers delay billions of dollars in payments to a union-administered trust - called a VEBA, or voluntary employee beneficiary association. The VEBA is set to take over health care for blue-collar retirees starting in 2010, but a $7 billion contribution that GM owes its VEBA could be postponed indefinitely. The auto companies and the UAW agreed to establish the VEBA as a way to transfer future hourly retiree health-care costs off the automakers' books. The VEBA will be funded by employer and employee contributions, including wage deferrals and modified retiree benefits. Several autoworkers pointed out that delaying payments to the retiree health-care trust agreed to in last year's contract means postponing a cost-cutting measure. By 2010, the VEBA trust will cut employer costs for retiree healthcare at Chrysler, Ford, and General Motors by 50%, saving tens of billions of dollars at each company. "The main reason our competitors in the United States have lower costs for retiree benefits is not because they don't have union contracts; it's because they only recently began to have U.S. retirees. In addition, the majority of retirees from companies such as Honda, Toyota, and BMW live in countries where universal, national health systems provide quality, affordable healthcare."

Editorial : Our Elected officials on capitol hill must share/shoulder in the blame for this !

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