General Motors has reached a tentative agreement with the United Auto Workers union to establish an independent retiree healthcare trust.
“This agreement helps us close the fundamental competitive gaps that exist in our business,” says the automaker’s chairman and chief executive, Rick Wagoner. “The projected competitive improvements in this agreement will allow us to maintain a strong manufacturing presence in the United States along with significant future investments.”
Details are being withheld pending ratification, but reports say GM will shift most of its US$51 billion unfunded retiree healthcare obligation to a trust run by the UAW. The automaker will pay about 70%, or $36 billion, into the trust, called a voluntary employees benefit association.
The deal also ends a two-day strike across the United States, which forced GM plants in Canada to shut down.
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