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Fund for 30,000 Goodyear retirees' health care must receive approval from judge
By Jim Mackinnon
Beacon Journal business writer
Published on Thursday, Jul 24, 2008
And now for the $1 billion question:
When will a federal judge rule on an independent health-care trust for Goodyear's Steelworker retirees, the key issue in contract talks that led to an 85-day strike in 2006?
District Court Judge John R. Adams said ''as soon as possible'' at the conclusion of closing statements that ended a hearing Wednesday in his Akron courtroom. Adams, who is charged with giving the final thumbs up or down on the Voluntary Employees Beneficiary Association, or VEBA, has said he needs to make sure the proposed plan is fair and economically viable.
The plan is designed to provide health-care benefits to about 30,000 retired Steelworkers, including thousands of retirees and their spouses in the Greater Akron area.
Goodyear ultimately agreed to make a one-time payment of $1 billion into the plan, after which it would not be responsible for providing health-care benefits to the union retirees. Current working Steelworkers will be required to pay a portion of cost-of-living increases and profit-sharing into the plan.
Adams spent much of Wednesday asking lawyers and witnesses if the union membership was adequately informed about how the VEBA works.
Steelworkers official Ron Bloom, a former investment banker, said he thought the Goodyear union members understood the issues.
The union has agreed to VEBAs at other companies, including steel companies that have since gone bankrupt, he said.
If there is no VEBA and Goodyear goes out of business, retirees will get no company-provided health-care benefits, he said. A VEBA could keep providing benefits, although probably not forever, he said.
''We are often called to choose between non-ideal alternatives,'' Bloom said.
An actuarial consultant filed papers saying that the VEBA could, with $1- to $1.80-an-hour contributions from active workers, remain stable for 30 years.
More information is available at http://www.goodyear-veba-settlement.com.
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com.
And now for the $1 billion question:
Get the full article here.
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