Volvo to Fund Trust for Health Care Needs

PENNSYLVANIA-BASED truck maker Mack Trucks Inc has signed a pact with the United Auto Workers union to create an independent trust responsible for the health care of retirees, Swedish parent company AB Volvo said yesterday.

Volvo said it will fund the trust with US$525 million in cash, which will be paid in equal installments over a five-year period.

The deal is part of a new collective bargaining pact and needs approval by UAW members, and an approval order from a United States district court. If approved, the first payment of US$110 million will be made in the second quarter of this year.

The trust will allow continued health care benefits for current and future Mack Trucks retirees, Volvo said.

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