Catherwood LibraryILR School

For a generation, executives at the Detroit auto companies have complained that the huge cost of providing generous benefits for its unionized workers put them at a competitive disadvantage with surging foreign car companies like Toyota and Honda. Now, with a new contract agreement with the United Automobile Workers reached before dawn yesterday, General Motors has taken a momentous step toward eliminating much of that burden, a step likely to be followed by Ford Motor and Chrysler. The contract?s main feature ? a health care trust called a voluntary employee benefit association, or VEBA ? means that GM will no longer have to carry the debt it will owe for employee and retiree health care benefits on its books.