DETROIT – The retired care trust of the UAW is no longer represented on the board of directors of General Motors.
The UAW Retiree Medical Benefits Trust forfeits its right to appoint a nominee to the GM Council when it sold 40 million shares in the company in February.
To maintain the seat, the trust – GM's largest shareholder – had to maintain at least 50 percent of the shares it had initially acquired as part of the automaker's bankruptcy in 2009. The deal was part of a shareholder agreement from October 2009 at the UAW Trust, GM and the US Treasury.
At the time of the February share sale, it was unclear whether the initial shares in the agreement contained a threefold share split prior to the IPO of the automaker in November 2010, as a result of which the ownership of the trust fund increased from 26.5 million to 262.5 million shares. .
The trust – a voluntary employee benefit organization or VEBA – and the company confirmed the loss of the board on Friday, referring to the sale in February, reducing the fund's shares to 100.15 million – below the 50% threshold.
"The VEBA's right to appoint a director for election to the Board of Directors was based on the VEBA that owned a certain percentage of the shares that they initially acquired in 2009," GM said in a statement. "After their February sale of GM shares, they no longer meet this requirement."
The seat of the trust had remained vacant since December 2017, when retired UAW vice president Joe Ashton resigned amidst a widening of the federal probe in joint training centers led by union and Detroit car manufacturers' representatives.
Ashton, who was appointed to the GM board in August 2014, was the first representative of the UAW to come aboard GM's more than 100-year history.
On Wednesday, GM Jami Miscik, CEO of the geopolitical consulting firm Kissinger Associates in New York, named the board. She reduced the number of board members to the total when Ashton was on the board.