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UAW suit says GM owes $450M

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UAW suit says GM owes $450M

Auto company disagrees that it should pay money to union-run retiree health care fund

David Shepardson / The Detroit News

The United Auto Workers union sued General Motors Co. in federal court Tuesday, contending the Detroit automaker owes a union-run retiree health care fund $450 million.

The suit, filed in U.S. District Court in Detroit, contends that General Motors Corp. agreed in June 2007 to pay $450 million to settle a UAW claim against Delphi Corp., GM's former parts unit, in the supplier's bankruptcy.

Delphi did not acknowledge the claim, and the company's best assets were purchased by a successor company, Delphi Holdings LLP, which exited bankruptcy Oct. 6.

Under the terms of the claim settlement, the GM payment to the UAW was to be made after Delphi exited bankruptcy.

GM filed for bankruptcy in June. The automaker's best assets were acquired by a government-sponsored entity known as General Motors Co.

The UAW contends in its lawsuit that the "new" GM agreed to assume all of its labor contracts with the UAW -- including the 2007 deal among GM, Delphi and the UAW.

But GM disagrees. On Oct. 29 the UAW sought the payment from the automaker. On Nov. 11, GM refused to make the payment.

The UAW says the payment was to be made to its voluntary employees' beneficiary association -- a fund that now pays for hourly retiree health care.

The suit was assigned to U.S. District Judge Avern Cohn.

GM has not yet responded to the suit.

Delphi filed for Chapter 11 bankruptcy in October 2005 and struggled to emerge from court protection for four years.

The supplier ultimately abandoned its pensions and ended health care and life insurance coverage for retirees from salaried positions.

From The Detroit News: http://www.detnews.com/article/20100407/AUTO01/4070347/1148/UAW-suit-says-GM-owes-$450M#ixzz0kQ0rz8jM

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UAW sues GM over Delphi pact stipulation



The UAW filed a lawsuit Tuesday against General Motors, claiming the automaker owes the union $450 million as part of a 3-year-old contract with its former parts division, Delphi.

In the lawsuit, filed in U.S. District Court in Detroit, the UAW contends that GM was obligated through a labor contract and the bankruptcies of both GM and Delphi to pay $450 million intended for the UAW's Voluntary Employee Beneficiary Association for Delphi workers. That trust, called a VEBA, is to provide for retiree health care.

In its lawsuit, the UAW said GM in November rejected the UAW's written request for payment into the Delphi VEBA. Since then, GM "has failed and refused to make the contractually required payment," the union said in the filing.

GM spokesman Tom Wilkinson declined to comment on the lawsuit Tuesday evening.

Delphi filed for bankruptcy protection in 2005. As part of that reorganization, the supplier sought concessions from its UAW-represented workforce, including a $10-an-hour wage cut, from about $28 to $18 an hour for some workers, plant closures and other concessions.

Delphi argued that the cuts were necessary to bring the wages in line with comparable pay at parts factories.

The UAW points out in the eight-page suit that GM was a party to the original 2007 deal. The automaker, during its own bankruptcy last year, assumed all of its contracts with the UAW including the agreement with Delphi and the union, the UAW noted in its filing.

The lawsuit comes after GM acquired four former Delphi plants and Delphi's Steering division during the supplier's bankruptcy case, which ended in October.

Now, GM is seeking additional concessions from those operations.

Last week, workers in GM's Wyoming plant near Grand Rapids -- a former Delphi facility -- voted down a tentative agreement that included a wage freeze for production workers and a pay cut for skilled trades workers.

Workers there are to vote again on the contract. The updated contract will allow employees to sponsor new hires.



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Nothing to know here until the court receives the facts as to whether or not the agreement stands valid due to the bankruptcy.

I can imagine the UAW letters to its members being chalk-full of GM-slamming for typical posturing and propaganda in the meantime.

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