Labor Dept wants exemption for GM health care plan

[Omaha Steve]

http://www.google.com/hostednews/ap/article/ALeqM5h3ybHQyGKfPNjRTAC6Ze8UruHBVAD9APA98G1

By KEN THOMAS (AP) – 2 days ago

WASHINGTON — The Labor Department said Thursday it was seeking an exemption for General Motors' new retiree health care plan that would implement the automaker's move to transfer company securities into the health care trust.

The United Auto Workers' retiree health care trust fund received a 17.5 percent ownership stake in GM as part of the company's government-led plan to emerge from bankruptcy protection last summer. The health care trust, which begins Dec. 31, will cover 700,000 GM retirees and dependents.

Detroit's automakers negotiated with the UAW in 2007 to create the health care trusts to address huge labor cost disadvantages compared with Japanese auto manufacturers. GM faced a projected $50 billion in future health care costs and was able to unload the costs from its books by persuading the UAW to accept funding to set up the Voluntary Employees Beneficiary Association, or VEBA.

The proposed exemption would implement the GM plan developed through the bankruptcy courts to transfer company securities, including common stock, preferred stock and $2.5 billion to the health care trust.

FULL story at link.