The United Auto Workers union is prepared to take over retiree health-care plans from the three U.S. automakers today, President Ron Gettelfinger said.
"We've got a team put in place to make sure everything works as it is supposed to," Mr. Gettelfinger said.
General Motors Co., Ford Motor Co., and Chrysler Group LLC will be able to shed billions of dollars in annual operating costs in exchange for making stock and recurring cash payments to the fund.
The fund would cover as many as 675,000 retirees and their spouses, according to an August estimate by the Center for Automotive Research in Ann Arbor, Mich.
Ford will deposit about $1.91 billion, GM will contribute $585 million, and Chrysler's first payment is $315 million in July, 2010, the Center for Automotive Research said.
"It's really a major moment, symbolically and substantively, for the companies and the union," said Harley Shaiken, a labor relations professor at University of California-Berkeley.
The handoff puts in motion the key money-saving concession from the 2007 UAW labor negotiations by having the funds, known as the VEBA for Voluntary Employee Beneficiary Association, assume coverage of retirees and spouses.
Chrysler and GM preserved the funds through their bankruptcies this year, giving the union stakes in the emerged companies in return for lowering the amount of cash the businesses were required to invest.
The three automakers originally agreed in 2007 to contribute about $54 billion combined to fund the UAW's VEBAs to gain the right to trim as much as $7 billion in retiree health-care costs annually and about $87 billion in future obligations.
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