GM does not owe $450 million in health benefits to retirees of Delphi, a former subsidiary of the company, a U.S. District Court judge in Detroit ruled.
The payments were part of a contract GM reached with the UAW in 2007. However, when the automaker came out of bankruptcy in 2009, a new contract negotiated with the union did not include the medical benefits.
The UAW argued that GM was still on the hook after Delphi escaped its own bankruptcy in 2009.
Judge Avern Cohen ruled that the 2009 contract between GM and the autoworkers took precedence and clearly showed the payments were not due.
What Your Peers Are Reading
“Whether New GM has a moral obligation regarding the payment is another matter and not relevant,” he wrote.