The sleuth reporters at Automotive News have uncovered that the appointment of Kissinger Associates CEO Jami Miscik to the General Motors Board of Directors had much to do with a vacant seat left behind by UAW Vice President Joe Ashton. Ashton resigned in December 2017, following a federal probe into joint training centers overseen by representatives of the United Auto Works and Michigan-based automakers. Ashton, who was the first and only union member on the General Motors Board, and also represented the UAW Retiree Medical Benefits Trust, or otherwise known as the VEBA fund.
Ashton’s seat has been left empty until Miscik’s appointment this week.
There’s more to the story, as one might be wondering why the UAW didn’t appoint another board member after nearly a year. It turns out that the UAW forfeited their position on the General Motors Board of Directors in February 2018, when the VEBA trust sold 40 million shares of GM stock. As contracted back in 2009, to hold a position on the General Motors Board, the trust was not to give up more than 50 percent of its 265 million shares, or 17.5% of the company – making it GM’s largest shareholder. The February selloff had eventually – after selloffs and GM buybacks – depleted VEBA’s shares of General Motors to 100 million, which can be valued at around $3.179 billion after trading closed on Friday.
The UAW initially acquired these shares as part of the GM’s emergence from bankruptcy in 2009. The agreement was part of an October 2009 stockholder agreement among the UAW trust, General Motors and the U.S. Treasury. The “new” GM had its IPO on November 17, 2010, valued at $33 per share.
“The VEBA’s right to nominate a director for election to the Board was predicated on the VEBA owning a certain percentage of the shares that they initially acquired in 2009,” GM said in a statement to Automotive News. “After their February sale of GM shares, they no longer meet this requirement.”
The VEBA fund continues to exist as a means to support UAW retiree pensions.