The United Auto Workers is urging a bankruptcy court to quickly approve its labor agreements with Chrysler so it can move forward with retiree health and pension obligations.
Chrysler filed for bankruptcy protection Thursday in New York. Under an agreement ratified by UAW members, the healthcare trust overseeing retiree benefits will own a 55% stake of the restructured automaker.
Like other struggling automakers General Motors and Ford, Chrysler agreed in 2007 to set up a Voluntary Employee Beneficiary Association, or VEBA, an independent fund that oversees UAW retiree and spousal medical benefits, starting in 2010. Chrysler agreed to contribute about $10 billion to the VEBA for retiree medical care.
The UAW says that the U.S. Bankruptcy Court must approve the labor agreements soon. We will urge the court to act swiftly, Ron Gettelfinger, president of the UAW, said in a statement. Gettelfinger told National Public Radio that the VEBA will begin selling Chrysler shares soon to raise needed cash to pay for retiree healthcare.