Union to sell stock

The United Auto Workers union has no intention of keeping its 55 per cent stake in the new Chrysler and will sell the shares to fund a trust that will take over retiree health care costs next year, the union’s president said Monday.

STERLING HEIGHTS, Mich. — The United Auto Workers union has no intention of keeping its 55 per cent stake in the new Chrysler and will sell the shares to fund a trust that will take over retiree health care costs next year, the union’s president said Monday.

Speaking to reporters at a news conference in suburban Detroit, Ron Gettelfinger said the trust, called a voluntary employees beneficiary association (VEBA), will struggle at first. It is starting with US$1.5 billion from an existing company health care trust, and will get $300 million from the company next year.

Gettelfinger said that critics who think the union is getting a better deal than Chrysler’s secured debtholders are wrong because the UAW is taking a big risk with Chrysler stock funding the trust. The stock is worthless today, he said.

Some of Chrysler’s creditors, however, are objecting to the deal in bankruptcy court.

After the automaker and Treasury couldn’t come to an agreement with certain debtholders, Chrysler filed for bankruptcy protection Thursday and is trying to emerge in 30 to 60 days as a stronger company that could eventually end up majority owned by Italy’s Fiat Group SpA.

Gettelfinger said the union made concessions in 2007 and this year that have helped the company, although he would not place a specific number on how much the concessions are worth.

“It is billions and billions of dollars in relief to the corporation from the standpoint of cash flow,” Gettelfinger said.

While he said he is confident in the trust’s funding, Gettelfinger warned that VEBA will be “on life support” initially. Benefits already have been cut and could be further reduced depending on funding, he said.

Although the trust has a seat on Chrysler’s new board, it essentially has no voting rights because it must vote with a majority of independent directors, he said.

The union endorsed a deal for Fiat to run Chrysler and potentially take a controlling stake because it was the best option, Gettelfinger said.

“Of all of the alternatives that were out there in front of us, clearly this is head-and-shoulders above anything else,” he added.

Just Posted

Shale oil producer seeking long-term river water supply

A company behind what is billed as Canada’s first commercial shale oil… Continue reading

Red Deer’s crisis line workers are busy dealing with multiple emergencies

Callers need everything from mental health counselling to their basic needs met

Pleaded guilty: Ex-Red Deer teacher gets 3 years for sex offences against kids

SASKATOON — A former Saskatoon teacher who admitted to sexual offences involving… Continue reading

Rental market picking up in Red Deer

There are fewer “for rent” signs in Red Deer than there have… Continue reading

Alberta government to partially backstop new $2 billion dollar bitumen upgrader

CALGARY — The Alberta government is providing a $440 million loan guarantee… Continue reading

2-for-1: Total lunar eclipse comes with supermoon bonus

On Sunday night, the moon, Earth and sun lined up to create the eclipse, which was visible throughout North and South America

Backlund scores OT winner for Calgary Flames in 3-2 win over Carolina Hurricanes

Flames 3, Hurricanes 2 (OT) CALGARY — Mikael Backlund scored 15 seconds… Continue reading

Glendening’s two-goal performance leads Red Wings past Oilers 3-2

Red Wings 3, Oilers 2 EDMONTON — Luke Glendening had a pair… Continue reading

New Canada Food Guide nixes portion sizes, promotes plant-based proteins

OTTAWA — The Canada Food Guide’s familiar food rainbow has been replaced… Continue reading

New Canada Food Guide nixes portion sizes, promotes plant-based proteins

Guide no longer lists milk and dairy products as a distinct food group

B.C. animators land Oscar nominations

‘Animal Behaviour’ by Vancouver’s David Fine and Alison Snowden among several Canadians on the short list

Canadian talent abound on newly revamped Vancouver Whitecaps squad

VANCOUVER — The Vancouver Whitecaps may need to stock up on maple… Continue reading

China demands US drop Huawei extradition request with Canada

China detained two Canadians on Dec. 10 in an apparent attempt to pressure Canada to release Meng

Most Read