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Accord gives Ford flexibility in paying healthcare costs

New York Times, February 24, 2009

The Ford Motor Company can substitute its stock for as much as half of its payments into a retiree healthcare trust, under a deal announced by the automaker and the United Automobile Workers union. The agreement could form the basis for similar deals with General Motors and Chrysler. The UAW, in its 2007 contract with the Detroit automakers, agreed to shift billions of dollars in retiree healthcare liabilities from the companies to a new, independent trust known as a voluntary employee beneficiary association. But as GM and Chrysler teeter on the brink of bankruptcy, they are unable to pay as much into the trust as they had agreed to in the contract.