Former Michigan Governor Jim Blanchard will take the VEBA seat on Chrysler Group's board. Nearly 30 years ago, as a U.S. Congressman, he helped the automaker win its first federal bailout.
The United Auto Workers has tapped an old ally to serve as its representative on the board of directors of the reorganized Chrysler Group LLC, newly emerged from bankruptcy and now effectively under the thumb of the Italian automaker, Fiat.
The UAW announced the Voluntary Employee Beneficiary Association, or VEBA, has named former Michigan Governor James Blanchard to serve as its representative on the “new” Chrysler’s board. The terms of the deal that sold Chrysler to Fiat allows the VEBA to appoint one director.
Blanchard will play a critical role. Though the union emerges as Chrysler Holding’s largest shareholder, the plan overseen by the Obama Administration’s Auto Task Force gives the UAW only limited say in the new company’s day-to-day operations.
“In accordance with the agreements establishing Chrysler Holding, LLC, the VEBA trustees have the right to name a director of the corporation, with consent of the UAW. Other company directors will be named by Fiat, the U.S. government, and the government of Canada,” the union noted in a statement.
Blanchard has had a long and significant association with Chrysler. He was instrumental in helping arrange the first federal bailout of Chrysler in 1980, when he was a member of Congress from Michigan. e later served as Michigan governor, and then as a U.S. ambassador to Canada under former President Bill Clinton.
“In his public and private sector roles, Blanchard has wide experience in the auto industry, international trade and related issues,” the union noted in its statement. The VEBA, which was set up to pay for the health care of Chrysler’s retired blue-collar workers after Dec. 31. 2009, is completely independent of the company. It now officially own 55 percent of the stock in the new company, but its role in managing the automaker, post-bankruptcy, is limited under the terms of the agreements that enabled the new Chrysler to survive.
UAW President Ron Gettelfinger also said, recently, that the UAW’s principle goal is to sell off its stake in Chrysler as soon as practical to raise cash to help pay for its health care bilsl. The stock itself has no value and represents a very risky investment by the union.