Chrysler, GM and union ownership

Now that the United Auto Workers will likely own big stakes of General Motors and Chrysler (possibly 39% of GM and 55% of the latter) some very thorny questions arise. How will management work with some degree of union ownership? First, let’s look at a few facts. The UAW won’t directly own equity stakes in the car companies. The shares will be owned by a Voluntary Employee Benefits Trust, or VEBA, which invests cash and manages a portfolio to pay union healthcare benefits. When all of the legal proceedings are done, which should be next year, the VEBA trusts will have a board of trustees who could get representation on the boards of the companies.

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