Goodyear and the United Steelworkers have cleared a major hurdle toward the creation of an independent health-care trust for tens of thousands of union retirees.
The tire maker has received preliminary federal court approval for the settlement with the Steelworkers, its largest union, with about 12,200 active workers.
U.S. District Judge John R. Adams in
Goodyear plans to make a one-time payment of $1 billion into the fund that is called a ''VEBA,'' or Voluntary Employees Beneficiary Association. Steelworkers will pay part of their cost-of-living increases and profit sharing into the fund.
Providing it gets final judicial approval, the fund, not Goodyear, will be responsible for paying future health-care benefits for union retirees.
If everything moves along as anticipated, the VEBA process is expected to be completed in the first half of 2008, Goodyear spokesman Keith Price said Tuesday.
The move is expected to save Goodyear about $110 million a year. Goodyear and the USW agreed to create the health-care trust in settling an 85-day strike that ended in late December 2006.
The class members total about 30,000 retirees, their spouses, surviving spouses and other dependents, according to the judge's order.
The VEBA will be run by a committee made up of three union representatives, two retiree representatives and four public members with expertise in benefits. Goodyear will have no one on the committee.
Union retirees have until March 4 to file written objections to the proposed settlement.
1 comment:
90% of the hospital bills submitted to the plan will contain overcharges.
Full transparency in billing and prices will help the union while reducing expenses for retirees.
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