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Volvo Sets Agreement With UAW on Mack Retirement Fund
Mack Trucks parent company Volvo AB has reached agreement with the United Auto Workers to create an independent trust responsible for the health care of Mack retirees, the Associated Press reported Monday.
Volvo said it wild the trust with $525 million in cash, which will be paid in equal installments over a five-year period, AP said.
The agreement is part of a new collective bargaining agreement and requires approval by the UAW, as well as an approval order from a U.S. district court, AP reported.
If approved, the payments will negatively impact Volvo’s second-quarter operating income by $110 million, Bloomberg reported.
The creation of the trust will allow continued health care benefits for current and future Mack Trucks retirees while completely eliminating Mack’s health care liabilities, Volvo said in a statement.