2012 statement of VEBA includes $3 billion in unfunded obligations

Article by Anita Panait, on October 24, 2013

VEBA, a United Auto Workers union retiree health-care trust, is still facing $3 billion in unfunded obligations, according to its amended 2012 financial statement. Unfunded obligations for the year earlier were over $5 billion. VEBA’s amended statement shows that its benefit obligations dropped by $414.9 million to $13.4 billion during 2012.

The net value of the trust’s assets surged to $10.3 billion, boosted primarily by an increase in the estimated value of its 41.5-percent holdings in Chrysler Group LLC. Italian carmaker Fiat S.p.A. owns the remaining 58.5 percent. The shortfall means that VEBA has to maximize the value of its stake in Chrysler to cover the projected cost of retirees’ health care. The trust, however, cannot agree with Fiat-Chrysler CEO over the price of its stake, moving VEBA to compel him to file in September for a Chrysler initial public offering.

Marchionne has been attempting to merge Fiat and Chrysler to create a global carmaker large enough to compete against major players like Toyota, General Motors and Volkswagen. The process of setting a value in the public offering may help break the stalemate between VEBA and Fiat, but the Italian carmaker has already warned that an IPO may deteriorate its relationship with Chrysler.

Over a third of the value of VEBA’s assets is in Chrysler stock, according to the amended statement. VEBA provided health-care coverage for 61,214 people at the end of 2012, compared with 63,171 a year earlier. VEBA gained stake in Chrysler holding as part of the carmaker’s 2009 government-financed bankruptcy that handed control of the carmaker to Fiat.

If you liked the article, share on:

Comments

Recommended

One of the executives at Volkswagen tagged in the so-called Dieselgate scandal has pleaded not guilty to a list of allegations surrounding the carmaker’s actions to cheat emissions regulations in...
by - February 27, 2017
When the Crown De Luxe saloon was first released in 1972, it was at that time the most lavish Toyota model available to British customers. Both unusual and exclusive, one...
by - February 27, 2017
The ride-sharing fleet of sharing Lyft Inc. will soon include thousands of specially fitted self-driving Chevrolet Bolt electric vehicles, courtesy of General Motors. If plans push through, Lyft’s clients would...
by - February 27, 2017
J.D. Power has officially released the 2017 Vehicle Dependability Study, an annual list of the most dependable brands in the auto industry. Once again coming on top is Lexus, the...
by - February 26, 2017
Citroen revealed that its entry to the Chinese market is moving forward with the planned release of the new generation C5. While still on sale on this part of the...
by - February 26, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries