Bloomberg News

Chrysler’s UAW Health Care Trust Assets Rise 18% Amid IPO Push

October 14, 2013

The UAW Chrysler Health Care Trust said its assets grew by $1.58 billion last year, more than half of which came from the rising value of its Chrysler holding.

The trust’s net assets grew by 18 percent in 2012 to $10.3 billion, according to its 2012 financial statement, filed Oct. 11. Almost $900 million of the gain resulted from an increase in the value it placed on its Chrysler stake. Expenditures for benefits rose less than 0.1 percent to $631.1 million.

Sergio Marchionne, chief executive officer of Chrysler and majority owner Fiat SpA (F), has spent four years trying to merge the companies. Fiat filed for an initial public offering of Chrysler shares last month at the behest of the trust. The two sides are sparring over the value of the trust’s 41.5 percent stake, listed as $3.6 billion in the 2012 filing.

Marchionne valued the stake at $1.7 billion in July, when the trust said it had increased to $4.2 billion. Matt Wood, a spokesman for the trust, and Katie Merx, a Chrysler spokeswoman, declined to comment on the filing.

Health-care trusts for retirees from General Motors Co. (GM:US) and Ford Motor Co. (F:US) also reported increases in net assets, a reversal after the three funds showed losses for 2011. Chrysler’s trust, organized as voluntary employee beneficiary plan, or VEBA, had lost $733.6 million a year earlier. Its liabilities more than doubled last year to $349.6 million.

Since 2009

The trust received its stake in Auburn Hills, Michigan-based Chrysler as part of the automaker’s 2009 bankruptcy to help pay for the medical benefits of Chrysler’s union retirees. The trust covered the medical benefits for 61,214 people at the end of 2012, according to its 2012 financial statement.

The GM UAW retiree health-care trust ended 2012 with almost $30 billion in net assets, 5.8 percent increase from the beginning of the year, according to records filed with the U.S. Department of Labor on Oct. 11. The trust completed 2012 with a net income of $1.65 billion compared with a $4.7 billion loss in 2011.

In September, Detroit-based GM said it plans to buy back almost half of the trust’s preferred shares in the automaker for $3.2 billion.

The Ford UAW retiree health care trust ended 2012 with $15.9 billion in net assets, a 5.4 percent increase from the beginning of the year, according to its filing. The trust ended the year with net income of $806.8 million compared with a $973 million loss in 2011.

To contact the reporter on this story: Mark Clothier in Southfield, Michigan, at mclothier@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net


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