Wall Street and VEBAs

As discussed earlier on this blog, the United Autoworkers (UAW) and General Motors (GM) entered in a historical five-year agreement which will transfer the administration of retiree health benefits to the UAW.  We've explore the potential downfall of such arrangements for unions, but apparently others are licking their lips.

From the Detroit Free-Press:

So, does Wall Street now go from cursing unions to courting them?

Wall Street-types are looking at the potential for managing a pile of money now that the UAW and General Motors Corp. have reached a tentative agreement for the creation of a retiree health care trust.

GM is expected to have to come up with $35 billion to fund the voluntary employee beneficiary association, or VEBA, that it wanted as part of the 2007 contract talks.

As GM goes, so likely will Ford Motor Co. and Chrysler LLC. The Detroit Three are looking to get tens of billions of dollars in health care liabilities for their retirees off their books. The UAW would be running the retiree medical plans . . . .

If Ford and Chrysler both get similar health care trust agreements, auto experts say the UAW could be turning to banks, financial-service firms and investment companies to manage about $70 billion for the Detroit Three's retirees.

And let's face it, even on Wall Street, where millions can look like pocket change, a $70-billion bonanza couldn't completely be ignored.

So, let me get this straight: companies will likely profit, while employee retirement health care is up in the air.

Sound fair to everyone?  A national health care system sounds better every day.

PS