By Kevin Krolicki
DETROIT (Reuters) - General Motors Corp
The creation of a voluntary employee beneficiary association -- or VEBA -- was the most striking component of the tentative agreement between GM and the IUE-CWA union.
GM agreed to pay $1.6 billion into a fund for IUE-CWA retirees over the next few years in a deal patterned after the automaker's agreement with the United Auto Workers last year, the union said.
GM confirmed it had reached a tentative agreement with the IUE-CWA union over terms for closing its Moraine, Ohio plant where it builds the Chevy TrailBlazer and GMC Envoy.
GM spokesman Tony Sapienza said the automaker would not comment on the details of its offer to the roughly 1,500 union-represented workers until after a ratification vote scheduled for next week.
Under the deal's terms, which were posted on a union web site, GM would offer buyouts and early retirement incentives similar to terms it has offered to reduce jobs in plants represented by the UAW.
The automaker would also pay out $3,850 to each affected worker.
"We are proud of what we have won, but realizes nothing compensates for the end of a career," a message to workers on a web site run by the IUW-CWA local in Moraine said.
GM said earlier this month that it would close the Moraine plant by year-end. The automaker had identified the plant in June as one of four North American truck plants employing about 10,000 workers that it planned to close by 2010.
But U.S. auto sales dropped to 15-year low over the summer months, and analysts now expect the fourth quarter will be weaker and that any recovery is unlikely to begin until sometime in 2010.
GM reached a deal with the UAW last year under which it will shift its $47-billion obligation to pay for health care for some 270,000 union-represented retirees to a trust fund affiliated with the union.
GM is funding the UAW-affiliated VEBA with $29.5 billion, including an initial contribution of $16 billion from an existing health-care trust account.
In a VEBA, companies like GM can make tax-free contributions to a trust in exchange for taking a liability for future health care costs from its balance sheet.
The IUE-CWA said it would set up a board to manage the VEBA account which will take effect in January 2012.
The Moraine, Ohio plant now slated for closure by GM had been a Frigidaire plant represented by the IUE-CWA before it was acquired by the automaker.
All of GM's other U.S. assembly plants are represented by the UAW.
(Editing by Leslie Gevirtz)
