The UAW and GM have apparently come to agreement on a new contract, ending a day-and-a-half strike. Terms weren't disclosed, but are believed to contain some job security concessions in exchange for the formation of a VEBA.
I am not sure what will become of the VEBA, but it is hard to see that being a good deal for retirees. The only way that this saves GM any money is if it's underfunded -- so, by definition, if it's a savings for GM it's going to run out of money as happened at Caterpillar.
Then again, the VEBA could be funded more or less fully (70% is the figure that's been batted around, which is close to full funding as some of the obligations of the fund haven't actually been incurred yet), which makes it simply a means of removing uncertainty from GM's books, and making Wall Street happy with little effect on the actual size of the obligation.
Watch this space -- as the details come out it'll be interesting to see what happened, and if the contract is ratified.
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