Ford completes transfer of retiree healthcare to VEBA, makes extra $500M payment

[wickedstangs]

<p>Filed under: <a href="http://www.autoblog.com/category/ford/" rel="tag">Ford</a>, <a href="http://www.autoblog.com/category/uaw-unions/" rel="tag">UAW/Unions</a></p><div style="text-align: center;"><img hspace="4" vspace="4" border="1" src="http://www.blogcdn.com/www.autoblog.com/media/2010/01/mulallycheck_opt.jpg" alt="" /></div>
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Everything's coming up roses for <a href="http://www.autoblog.com/make/ford/">Ford</a>. That's what we keep hearing in the news anyway. Ford can now add one more feather to its cap of accomplishments with today's announcement that it has completed transferring all of its retiree healthcare obligations to the VEBA trust run by the United Auto Workers union. The official press release from Ford after the jump is dense, but the gist is that Ford has made its required payments to the VEBA fund and thrown in an extra $500 million payment that isn't due until later for good measure. That last part not only gets The Blue Oval ahead of the game, but also demonstrates the degree of confidence that Ford has in both its turnaround plan and what its balance sheet will look like in the coming years.<br />
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The net effect of this news is that Ford can practically erase retiree healthcare off its books. Sure, the company takes a big hit now with the billions of dollars it just paid into the UAW-run VEBA account, but over the long term Ford won't be forced to roll the rising cost of retiree health care into the price of its vehicles. Both <a href="http://www.autoblog.com/make/gm/">General Motors</a> and <a href="http://www.autoblog.com/make/chrysler/">Chrysler LLC</a> have the same obligation as Ford to pay into VEBA accounts and transfer control of retiree healthcare to the UAW, but neither has completed that process to date.<br />
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[Source: Ford | Source Image: Bill Pugliano/Getty]<p><a href="http://www.autoblog.com/2010/01/04/ford-completes-transfer-of-retiree-healthcare-to-veba-makes-ext/" rel="bookmark">Continue reading <em>Ford completes transfer of retiree healthcare to VEBA, makes extra $500M payment</em></a></p><p style="padding:5px;background:#ddd;border:1px solid #ccc;clear:both;"><a href="http://www.autoblog.com/2010/01/04/ford-completes-transfer-of-retiree-healthcare-to-veba-makes-ext/">Ford completes transfer of retiree healthcare to VEBA, makes extra $500M payment</a> originally appeared on <a href="http://www.autoblog.com">Autoblog</a> on Mon, 04 Jan 2010 16:57:00 EST. Please see our <a href="http://www.weblogsinc.com/feed-terms/">terms for use of feeds</a>.</p><h6 style="clear: both; padding: 8px 0 0 0; height: 2px; font-size: 1px; border: 0; margin: 0; padding: 0;"></h6><a href="http://www.autoblog.com/2010/01/04/ford-completes-transfer-of-retiree-healthcare-to-veba-makes-ext/" rel="bookmark" title="Permanent link to this entry">Permalink</a>&nbsp;|&nbsp;<a href="http://www.autoblog.com/forward/19302362/" title="Send this entry to a friend via email">Email this</a>&nbsp;|&nbsp;<a href="http://www.autoblog.com/2010/01/04/ford-completes-transfer-of-retiree-healthcare-to-veba-makes-ext/#comments" title="View reader comments on this entry">Comments</a>


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[Vaporizyed]

I really do not see any negatives to this. Even though Ford had to make a large payment into the employee VEBA fund it will only come out to benefit Ford in the long term. A few years ago an attempt by various county agencies here in San Diego County attempted to do this and it failed due to the fact that the head of Human Resources for the County of San Diego wanted to still have his hands in the cookie jar.

If anyone doesn't know what a VEBA is or how it works, I can explain it if you have about three hours to set aside and listen to some very "dry" talk.