In a 36-page decision, U.S. District Judge Avern Cohn in Detroit
said on Tuesday that the current GM did not assume any obligation
for the payment, which the automaker had contracted to make two
years before its June 2009 bankruptcy filing.
The payment had been part of a June 2007 contract between the old
GM, its former Delphi Corp affiliate and the UAW.
It was not, however, included in a different contract over medical
benefits signed in July 2009 by the GM that emerged from Chapter 11.
The UAW claimed that the new GM owed the money by virtue of Delphi's
own emergence from bankruptcy in October 2009.
Judge Cohn, nonetheless, said the language of the 2009 contract made
clear that GM did not owe the payment.
He added that U.S. Bankruptcy Judge Robert Gerber in New York, who
oversaw GM's bankruptcy, found the contract fair, reasonable and in
retirees' best interests.
"Whether New GM has a moral obligation regarding the payment is
another matter and not relevant," he wrote. "The UAW's efforts to
turn the absence of language into language is reminiscent of the
efforts to capture a 'will o' the wisp.'"
UAW President Bob King in a statement said the union is evaluating
the decision and considering whether to appeal.
"We are disappointed with the Court's decision in this case, which
seeks to protect benefits for retirees who worked all their lives to
help make GM and Delphi successful," King said in a statement.
[to top of second column]
Roughly 48,500 current GM workers are represented by the UAW, a
spokeswoman for the union said.
GM spokesman Dave Roman declined to comment on Cohn's decision.
Chapter 11 reorganizations can allow debtors to reject obligations
that predate their bankruptcies.
On Monday, the federal bailout of GM ended when the U.S. Department
of the Treasury said it had sold the last of its shares of the
The case is United Auto Workers v. General Motors LLC, U.S. District
Court, Eastern District of Michigan, No. 10-11366.
(Editing by Jan Paschal, Bernard Orr)
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