Way back when the UAW negotiated with the Big Three in 2007, the union agreed to set up Voluntary Employee Beneficiary Associations (VEBA) to handle health care liabilities. It was a logical gamble pressed on the union by very difficult economic circumstances–which have only gotten tougher. And now the VEBA is at risk–or at least what retirees can hope to see:

On Monday, G.M. pressed union leaders in a meeting in Detroit for a deal on financing what was the centerpiece of the 2007 U.A.W. contract — a perpetual, G.M.-financed trust to cover health care costs of hundreds of thousands of retired hourly workers and their surviving spouses.

   Someone I’ve known for probably twenty plus years, Ron Bloom, is being brought in to try to salvage the industry. The Wall Street Journal has this on Ron:

Organized labor leaders generally praised Ron Bloom after word spread on his appointment as a key adviser to the Obama administration on restructuring the auto industry.

Mr. Bloom, who made a name counseling U.S. steelworkers to accept major concessions in several bankruptcy cases, is expected to take a lead role on a new task force to judge the viability of General Motors Corp. and Chrysler LLC. Racing to secure new givebacks from their unions and bondholders, the two struggling auto companies are expected to submit their restructuring plans to the U.S. Treasury by Tuesday.

Ron Bloom

Alan Reuther, the legislative director of the United Auto Workers union, lauded the choice of Mr. Bloom, calling him a "very bright, talented person with a lot of experience about restructuring" in manufacturing industries.

Mr. Bloom had been an investment banker at Lazard Freres & Co. and then struck out on his own. In 1990, United Steelworkers union president Leo W. Gerard recruited him away to become his special advisor as the steel industry was going through its own restructuring. "I’d say he’s the smartest person I’ve probably ever met," Mr. Gerard said.

Together almost 19 years, the pair worked on as many as 50 financial workouts, including some bankruptcies where the steelworkers union played a critical role. "Ron has a sharp mind and a quick wit," Mr. Gerard said in an interview late Monday afternoon. Mr. Gerard said it was unclear how long Mr. Bloom would take leave from the steelworkers union, but added "when he’s able to return, we’d welcome him with open arms."

   And The New York Times also has an article.

In college, Mr. Bloom was outspokenly pro-union, and he had an aunt who was a leader of the teachers’ union and a great uncle who had been active in the bakers’ union.

   This won’t be an easy job.