GM doesn't owe $450 million in retiree benefits, U.S. judge rules

[Eugene]

Source: Reuters

GM doesn't owe $450 million in retiree benefits, U.S. judge rules

BY JONATHAN STEMPEL
Wed Dec 11, 2013 12:08pm EST

(Reuters) - A federal judge said General Motors Co is not required to pay $450 million to cover medical benefits for retirees, in a defeat for the United Auto Workers union.

In a 36-page decision, U.S. District Judge Avern Cohn in Detroit said on Tuesday that the current GM did not assume any obligation for the payment, which the automaker had contracted to make two years before its June 2009 bankruptcy filing.

The payment had been part of a June 2007 contract between the old GM, its former Delphi Corp affiliate and the UAW.

It was not, however, included in a different contract over medical benefits signed in July 2009 by the GM that emerged from Chapter 11.

[font size=1]-snip-[/font]

Read more: http://www.reuters.com/article/2013/12/11/us-gm-uaw-retiree-lawsuit-idUSBRE9BA0VL20131211

[SheilaT]

1. No surprise, really.

The airline industry discovered a while back that they could get out from under retirement obligations by filing bankruptcy. Plus of course, countless companies have been systematically underfunding their pension/retirement plans for a long time now.

[hollysmom]

2. wow that is really a big one - basically breaking a contracted agreement.

How come the governemtn honors it contracts with thieves (GE, worked there, they should have never been paid for some work) but companies do not have to keep their legal agreements if they are with unions? Contracts no longer worth the paper they are written on.

[OnlinePoker]

3. This is the reason, though I hate it, that I support the requirement for the Post Office to prefund

At least, if and when the Post Office goes under, the workers won't get screwed out of something they rely on to survive.

[westerebus]

7. Really?

Pre-funding 75 years worth of benefits in 10 years and that's OK?

There is no guarantee they won't get screwed.

Unless you can prove otherwise?

St. Raygun "fixed" social security back in 1982.

How's that being played out?

[Vox Moi]

4. What's good for the country is good for GM … and vice versa. - Charles Wilson, 1953

Former GM CEO, Secretary of Defense.
Ah, for the good old days when people could say something like that without looking totally ignorant.
Equating the interests of GM and the USA might have made sense before Flint got to looking like a ghost town, for the benefit of GM.
We bailed out GM, which is good for GM. Too bad we didn't include the workers.
I guess that all that we have now is the 'vice versa' part.

[PoliticAverse]

5. Yet another example of why health insurance should be separate from employment. n/t

[Sherman A1]

6. The court may have concluded that GM doesn't have to pay,

but GM still owes those retirees every dime (at least morally, in my opinion) to which was agreed in those contracts. Granted they will not collect, but they are still owed and I find it reprehensible that they will not be paid.