Ford May Use Stocks to Pay For Retiree Health Fund
"The Labor Department said Wednesday that it would let the Ford Motor Company use stock instead of cash to pay some of the $13.1 billion that it owed to a new retiree health care fund, pending a period of public comment," The New York Times reports. "Ford said that it needed the exemption so that it could move ahead with an agreement reached this year with the United Automobile Workers union that allowed Ford to substitute stock for up to half of its obligations to a union-managed health care fund." On Jan. 1, coverage will shift to the Voluntary Employee Beneficiary Association (VEBA), a fund created in contract between Ford and the UAW in 2007. The fund "is expected to help Ford eliminate billions of dollars in future liabilities" (Bunkley, 12/9).
Dow Jones Newswires/CNN: "Ford's new health plan would cover more than 285,000 retirees and their dependents, as well as a 'small number' of current employees, the Labor Department's Employee Benefits Security Administration said." (Mitchell, 12/9).
The Associated Press reports that the Labor Department has also filed requests for Chrysler and General Motors (12/9).