Big Three VEBA Board Chair Named as Trust is Implemented

April 11, 2008 ( - Former top Blue Cross executive Robert Naftaly has been named to chair an 11-member board that will manage billions of retiree benefit dollars for the Big Three auto makers.

The Detroit Free Press reported that Naftaly’s panel will administer the voluntary employee beneficiary association (VEBA), an independent trust for retiree health and retirement plan benefits for Ford, GM, and Chrysler. Naftaly will be joined on the committee by five other independent members: Olena Berg-Lacey, David Baker Lewis, Teresa Ghilarducci, Marianne Udow-Phillips, and Ed Welch.

According to the newspaper, Naftaly is a retired president and chief executive of PPOM — an independent subsidiary of Blue Cross Blue Shield of Michigan — and a retired executive vice president of Blue Cross. From 1983 to 1987, he was director of the state’s Department of Management and Budget. The other appointees have experience in pensions, law, and health care.

The VEBA board appointment comes as the United Auto Workers (UAW) and the automakers move to finalize the trust, a cornerstone of last year’s historic agreements between the union and automakers (See Viva Veba ). While the contracts have been ratified by UAW members, the VEBA still requires final court approval.

This week, U.S. District Judge Robert Cleland gave preliminary approval to Chrysler’s end of the deal. In early March, GM received similar approval. A hearing for Ford’s VEBA is scheduled for Friday.

Chrysler LLC, Ford Motor Co., and General Motors Corp. will put about $52 billion into the trust, ridding themselves of about $88 billion in estimated future health costs at a savings of about $36 billion, the news report said. The trust will have three sub-accounts and money from each company will pay only for their own retirees’ benefits.

The UAW has not named the five union representatives who will sit on the VEBA committee.