Wall Street Smells a Bonanza in VEBA
According to the Detroit Free Press:
GM is expected to have to come up with $35 billion to fund the voluntary employee beneficiary association, or VEBA, that it wanted as part of the 2007 contract talks.
As GM goes, so likely will Ford Motor Co. and Chrysler LLC. The Detroit Three are looking to get tens of billions of dollars in health care liabilities for their retirees off their books. The UAW would be running the retiree medical plans.
"The UAW is taking on a big job here -- they're now responsible for overseeing a large part of the livelihood of their retirees," said Bob Bowman, Michigan's treasurer from 1983 to 1991 and then sole fiduciary of the state pension system.
"They're going to want to find the very best talent."
If Ford and Chrysler both get similar health care trust agreements, auto experts say the UAW could be turning to banks, financial-service firms and investment companies to manage about $70 billion for the Detroit Three's retirees...click to continue.
