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By Beacon Journal staff and wire services
POSTED: 02:33 p.m. EDT, Aug 22, 2008
Goodyear Tire & Rubber Co. won federal court approval today for its plan to create a health-care trust for union retirees.
The largest U.S. tire maker, based in Akron, said it will make a one-time, $1 billion payment to the United Steelworkers union fund to cover future costs.
The payment will be made initially from existing cash reserves and available credit lines, Goodyear said.
Creation of the Voluntary Employees' Beneficiary Association, or VEBA, will result in annual savings of about $100 million and boost annual cash flow by about $130 million compared with 2007, Goodyear said.
''Gaining court approval for the VEBA is a win-win for Goodyear and for our current and future USW retirees,'' Chief Executive Officer Robert J. Keegan said in a statement. ''This agreement both protects retiree benefits for years to come and removes a significant legacy obligation from our North American business.''
United Steelworkers Local 2 President Peter Stamich deferred questions to the union's international headquarters personnel in Pittsburgh. Officials there said they were reviewing the court approval and would have a comment later.
Goodyear Tire & Rubber Co. won federal court approval today for its plan to create a health-care trust for union retirees.
The largest U.S. tire maker, based in Akron, said it will make a one-time, $1 billion payment to the United Steelworkers union fund to cover future costs.
The payment will be made initially from existing cash reserves and available credit lines, Goodyear said.
Creation of the Voluntary Employees' Beneficiary Association, or VEBA, will result in annual savings of about $100 million and boost annual cash flow by about $130 million compared with 2007, Goodyear said.
''Gaining court approval for the VEBA is a win-win for Goodyear and for our current and future USW retirees,'' Chief Executive Officer Robert J. Keegan said in a statement. ''This agreement both protects retiree benefits for years to come and removes a significant legacy obligation from our North American business.''
United Steelworkers Local 2 President Peter Stamich deferred questions to the union's international headquarters personnel in Pittsburgh. Officials there said they were reviewing the court approval and would have a comment later.
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