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$1 billion settlement needs OK of federal judge to create trust
By Jim Mackinnon Beacon Journal business writer
Published on Wednesday, Oct 31, 2007
Goodyear Tire & Rubber Co. and the United Steelworkers have agreed on a proposed settlement that will lead to the creation of an independent health care trust for union retirees.
The proposed settlement, which requires federal court approval, was filed Monday in Akron's U.S. District Court for the Northern District of Ohio.
Goodyear said Tuesday that it expects the process to create the trust known by the acronym ''VEBA,'' for Voluntary Employees' Beneficiary Association that will be completed sometime in the first half of 2008.
The process of creating the VEBA began in early July with the filing of a class-action lawsuit in federal court.
Upcoming steps in the process include getting preliminary court approval, followed by a 90-day notice period, another court hearing, final judgment and then a 30-day appeal period.
Goodyear is required to pay $1 billion into the VEBA, which then will be responsible for paying all future Steelworker retiree health care benefits. The union and the Akron tire maker agreed to create a VEBA after a strike by the union in late 2006.
Union members will pay part of their cost-of-living increases and profit sharing into the fund as well.
The VEBA will be run by a nine-member committee made up of three union representatives, two retiree ''class'' representatives, and four public members who have expertise in benefits. Goodyear will have no one on the committee.
Once the VEBA is created and functioning, the measure is expected to save Goodyear as much as $110 million a year that it otherwise would have had to pay out in health care costs.
The United Auto Workers, has agreed separately with General Motors and with Chrysler this year to create similar health care trusts for the company's union retirees as part of recently completed national contract talks. It is likely the UAW and Ford Motor Co. will also discuss the creation of a VEBA during contract talks that are expected to start soon.
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com.
Goodyear Tire & Rubber Co. and the United Steelworkers have agreed on a proposed settlement that will lead to the creation of an independent health care trust for union retirees.
Get the full article here.
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