- Independent Healthcare Trust established for CAW retirees
- Liability eliminated in exchange for C$0.8 billion cash and notes of C$1.1 billion
DETROIT – General Motors Company today announced that GM Canada Ltd. has secured the required legal approvals to establish an independent Canadian Healthcare Trust (HCT), which will administer retiree healthcare benefits going forward for Canadian Auto Workers (CAW) represented current retirees and CAW represented employees as of June 8, 2009.
“The new healthcare trust is another step forward as we work to de-risk and strengthen our balance sheet and position the company for sustainable profitability,” said Dan Ammann, GM senior vice president and chief financial officer.
The HCT, which GM Canada and the CAW agreed to in June 2009, became effective October 31, 2011. Similar to the United Auto Workers Voluntary Employee Benefits (VEBA) Trust implemented in the United States in December 2009, GM Canada has been released from any obligations associated with the cost of providing retiree healthcare benefits for eligible CAW represented retirees, surviving spouses and dependents. In exchange, GM Canada will transfer C$0.8 billion in cash and issue C$1.1 billion of notes to the HCT.
GM will account for the HCT as a plan settlement and expects to reduce its post-employment liabilities by approximately C$3 billion. GM will record an accounting gain associated with the HCT actions of approximately US$0.8 billion in the fourth quarter of 2011. Further details on the HCT will be in the company’s latest Form 10-Q filing which is expected to be filed with the Securities and Exchange Commission later this week.
General Motors Co. (NYSE:GM, TSX: GMM) and its partners produce vehicles in 30 countries, and the company has leadership positions in the world's largest and fastest-growing automotive markets. GM’s brands include Chevrolet and Cadillac, as well as Baojun, Buick, GMC, Holden, Isuzu, Jiefang, Opel, Vauxhall and Wuling. More information on the company and its subsidiaries, including OnStar, a global leader in vehicle safety, security and information services, can be found at http://www.gm.com.
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