When Ford Motor Co. and General Motors Co. hand over health care for hourly retirees to the UAW on Dec. 31, they also will hand over checks totaling nearly $2.5 billion.
Ford owes the most. As a first installment on a $13.2 billion obligation, Ford is scheduled to pay $1.9 billion to a UAW-administered voluntary employees' beneficiary association. At least $1.3 billion will be in cash, with the remainder in Ford stock.
GM, which had a $20 billion VEBA obligation before the concessions, is scheduled to pay $585 million to its UAW trust fund Dec. 31.
Chrysler Group's first-year cash payment, pegged at $315 million, is due July 15.
Ford has the largest total VEBA obligation of the Detroit 3: $13.2 billion over about the next decade. Ford can pay about half of it in stock.
GM has agreed to pay its UAW VEBA with a promissory note of $2.5 billion and $9 billion in preferred stock. Chrysler owes a note of $4.6 billion. With other equity consideration, the Chrysler UAW VEBA now owns 55% of Chrysler, and the GM UAW VEBA now owns 17.5% of GM.
David Barkholz is a reporter with Automotive News, a sister publication of Pensions & Investments