AT&T, Verizon Look to Ape GM/UAW Retiree Deal

Telecom next industry likely for VEBAs.
By Kevin Spak,  Newser Staff
Posted Oct 15, 2007 3:02 PM CDT
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(Newser) – GM’s pact with the UAW, which cleared $50 billion in retiree health costs from the automaker’s books by launching a union-run health fund, is drawing imitators. AT&T and Verizon are both hoping to mirror the arrangement created in GM’s deal, Bloomberg reports. The telecom giants have the S&P 500's second- and fourth-highest retiree obligations, a combined $71 billion.

An arm of the union that represents AT&T and Verizon employees, the Communications Workers of America, is already working on a pact for one GM plant. “We will be watching,” a Verizon spokesman said of GM’s deal. New accounting rules make such legacy costs balance sheet nightmares, making many companies consider the health-care trust funds.