UAW health trust names Blanchard to Chrysler board
DETROIT (AP) — The United Auto Workers union said Wednesday that trustees of its retiree health care fund have named former Michigan governor James J. Blanchard to the board of the new Chrysler-Fiat venture.
Italian automaker Fiat Group SpA closed a deal earlier in the day to become the new owner of most of Chrysler’s assets, saving the company from liquidation. The new company will be called Chrysler Group LLC.
Under the agreement brokered in the days leading up to Chrysler’s Chapter 11 filing, the United Auto Workers union is getting a 55 percent stake in the restructured company, which will be used to fund its retiree health care obligations. As part of the deal, the voluntary employees beneficiary association, or VEBA, that was set up to pay those costs received a seat on Chrysler’s board.
However, the union’s control in the boardroom will be limited. The trust essentially has no voting rights because it’s representative must vote with a majority of independent directors. Eight other company directors will be named by Fiat, the U.S. government and the government of Canada.
Blanchard, 66, served as Michigan’s congressman from 1975 to 1983, helping to sponsor legislation to provide $1.5 billion in federal loan guarantees to then-Chrysler Corp., which kept the automaker out of bankruptcy court. He served two terms as the state’s governor, leaving office in 1991, and later was named U.S. ambassador to Canada by the Clinton administration.
"In his public and private sector roles, Blanchard has wide experience in the auto industry, international trade and related issues," the UAW said in an e-mailed statement late Wednesday.
The VEBA will start paying health care costs next year for about 82,000 retirees. The total health care obligation is estimated at about $10.9 billion, plus additional costs for current workers who eventually will retire. The UAW has said it will need to sell off its majority stake in the automaker to fund the payouts.
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