Daimler will cough up $480 million in payment to settle a dispute with the United Auto Workers union over medical benefits for retired employees at its North American trucks operations, according to documents filed in a federal court in Tennessee.
The German carmaker has agreed to make contributions to a trust to finance a post-retirement health care plan that will support active and recently retired UAW-represented employees, court documents show.
The documents also show that the agreement was inked following a claim made by a group of retirees that the truck unit – divulged to be as Daimler Trucks North America LLC -- of illegally cutting their benefits.
A spokesman for the carmaker referred to its quarterly earnings report that said Daimler Trucks North America LLC and the UAW had signed an agreement over a health care plan as part of a collective bargaining agreement in May.
The report said that the cash outflow as a result of the agreement was expected in the fourth quarter of 2014. [source: automotive news - sub. required]