GM news - 2:00PM

UAW Discloses Terms of GM Deal - WSJ The United Auto Workers told union officials Tuesday that it has agreed to a deal with General Motors Corp. that will lead to the union owning 17.5% of the company once it restructures as part of GM's obligation to fund future retiree health-care obligations, a person familiar with the matter said. Under the deal, which was agreed to last week and is set for a UAW vote in coming days, GM place $10 billion of assets into a Voluntary Employee Beneficiary Association, of VEBA, on Jan. 1, 2010. The UAW will also receive a new note, payable in cash, for $2.5 billion. That note will be paid out in three installments taking place in 2013, 2015, and 2017. The details of the arrangement were outlined in an informational brochure detailing the agreement, which was obtained by The Wall Street Journal Tuesday. The UAW's VEBA had been owed $20 billion, but the UAW – responding to Treasury Department demands – has agreed to cut the cash obligation and receive a significant amount of what it is owed in stock or notes. In addition, the UAW will be given $6.5 billion in preferred stock in a reorganized GM. That stock includes a 9% cash dividend, under which the union's VEBA will receive $585 million annually for as long as the UAW holds the stock. That preferred stock is in addition to 17.5% of the company's common stock that is being promised by GM to the VEBA. The UAW also will receive a warrant for an additional 2.5% of the common stock in the new company. The UAW said that "with a greatly improved balance sheet, as well as with the significant restructuring of business operations, there is a realistic prospect that the stock in the new company will represent significant value in the future."

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This information is coming out in bits and pieces. Watch the news for further details. GM stock now up after being up down all day.