Back in 2007 the UAW union deiced to establish a trust fund that would control the healthcare benefits for all retirees from Ford, General Motors and Chrysler – today the people say the move was a success.
The experiment that started eight years ago could have the UAW delivering a major success – retirees, analysts and even executives involved in the 2007 contract that established the UAW Retiree Medical Benefits Trust claim the fund is working even better than originally forecasted. And with the healthcare costs set to increase on a nationwide level, the current UAW President, Dennis Williams, now seeks to use the VEBA as a row model for a new benefits trust that would direct the healthcare for the 141,000 hourly workers at General Motors, Ford and Fiat Chrysler Automobiles, and possibly later on even for the company salaried populace. And having healthcare expenses reduced without increasing costs for the UAW members is one of the top priorities for the union during the current contract negotiations with the Detroit Three.
“I think if the companies fail on the healthcare, it’s a missed opportunity, and I think the medical community will agree with me on that,” commented Williams recently. The original retiree VEBA was initially seen as a major win for the carmakers – getting rid of upcoming risks and costs and as a major gamble for the UAW – which bet it could deliver lower costs due to its sheer member size. Today the trust has managed to increase its balance – from $56.5 billion when it was initially created to at least $60.8 billion in net assets as of the end of 2013.