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.