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Retirees Were Promised Health Care—GM Deal Breaks the Promise |
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Workers and retirees have suspected for years that companies often use bankruptcy as an excuse to cheat retirees out of their promised benefits. Now, three unions say that’s exactly what the U.S. Treasury Department is doing to tens of thousands of General Motors (GM) retirees.
The IUE-CWA, United Steelworkers (USW) and the Operating Engineers (IUOE) plan to appeal a bankruptcy judge’s approval late last week of a plan to allow the new GM, which now is owned primarily by the taxpayers, to take away health coverage from 55,000 retirees at some GM and GM Delphi plants.
In a series of newspaper ads, the unions urge workers to call the White House at 202-456-1414 or send an e-mail to www.whitehouse.gov and ask President Obama to restore the GM retirees’ health care benefits. Click here to learn more about IUE-CWA’s campaign to save the retirees’ benefits.
The ads feature retirees like Debra Turner (see ad above), a GM retiree who suffers from multiple sclerosis and rheumatoid arthritis. At 51, she’s not eligible for Medicare. Until now, her GM health care paid for most of the $3,400 a month in medicines she has to take.
Turner says:
It’s not right for our government to sacrifice people’s health while it’s pouring out billions to save giant corporations like the banks and auto companies.
But the U.S. Treasury decision to wipe out health care benefits for retirees like her could mean that she will end up in a wheelchair because the cost of insurance—$8,000 a year—is out of reach.
The UAW, whose retirees at GM were able to keep their health care, is strongly backing the other unions’ efforts. An e-mail to UAW activists says:
The UAW stands in solidarity with our brothers and sisters from these other unions in their efforts to get justice for all GM retirees. Please take the time to contact President Obama on this issue. Tell the President that it is wrong for the U.S. Treasury Department to be sacrificing the health care of these retirees. Urge the President to take whatever action is necessary to ensure that these retirees receive the same treatment as UAW-represented retirees.
The GM retirees also picked up bipartisan support from 13 members of Congress from Ohio, where two of the affected plants are located. In a letter to Treasury Secretary Timothy Geithner, the representatives call on him to reverse the decision in order to “spare a disaster.” The Ohio congressional members’ letter emphatically stated to the Treasury secretary: “In short, it is your representatives who have decided that these retirees will not have an opportunity for a decent retirement.”
IUE-CWA President Jim Clark puts it bluntly:
It is a sad day in America when a formerly blue chip company joins hands with the government to rob those who built the company of the health care that was promised to them.
Our message is simple: Spending taxpayer dollars…[to strip] 50,000 retirees of their health care is not the change we voted for last November. The White House must direct the U.S. Treasury to reach a fair and equitable solution.
As the purchaser of GM, the Treasury Department determined which liabilities and assets would be transferred to the new company and which would stay behind in the bankrupt company. According to the union, a member of the administration’s auto taskforce told the bankruptcy hearing there was no “commercial necessity” for the new company to pick up the liability for these retirees.
Court documents obtained during discovery also show that GM decided to cut retiree health care by 87 percent so it could leave executive pension and salaried health care largely intact with only 32 percent and 25 percent reductions, respectively, the unions claim.
To add insult to injury, according to the unions, GM chief executive Fritz Henderson testified in January that the company decided to give salaried retirees a $300 a month increase in their pensions to offset what it would cost them to purchase insurance when the company eliminated their medical insurance.
USW President Leo Gerard says:
[The unions] hope our federal government will come to its senses on fairness for the former GM workers who contributed nothing less than the autoworkers to the fortunes of the company.
IUE-CWA represents 41,000 GM Delphi retirees and surviving spouses, whose benefits are valued at $2.87 billion. USW represents 6,200 retirees and surviving spouses, saying the present value of the lost benefits is at least $424 million. Other Delphi retirees are represented by the IUOE.
This is a cross-post from the Firedoglake blog.
14 Comments
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Ron Gettlefinger and the UAW leadership are a dollar short and a day late in their support of Retirees Health Care. They previouly demonstrated their desregard for Retirees when they cut the UAW/GM pension by $50.00 per month to supplement the Retiree Health care that cut their benefits and forces Retirees to pay for their doctor visits while the active workers get 5 free doctor visits per year.
Ron Gettlefing was part and parcel of the GM Bankruptcy deal. Those are the simple facts. The UAW and all Unions should NEVER break their promises to us Retirees.
This disaster is no surprise to those of us in the labor movement who know that the capitalists AND their government are going to look out for their own until workers are in the streets hurting the bosses wallets and demanding the things that working and poor people need.
The idea that you trust your future to the same bastards that have been exploiting you for decades is the game of the misleadership that controls the trade unions and political parties. They is a solution but first we must create that political organization that will not flinch at taking on the bosses and THEIR government in a fight for our rights, needs and futures.
IUE-CWA isn’t just losing their retiree healthcare, from what I have heard from an ex union official, those who are laid off are losing their sub, losing their early pensions, losing their medical insurance… and are not offered the buyout that has been offered to the UAW people…
those laid off at UAW have either a 100000 buyout plus a new car voucher or… sub for up to 2 years.., medical, early pensions etc.. those at the IUE-GM .. who did the exact same work… are getting the guillotine.. nothing.
Many are losing hundreds of thousand worth of pension health and sub benefits that they spent up to 26 years working for…
Only through government involvement in the bankruptcy court could they have lost everything in this manner.. in no other way of BK could they have lost it all.. the responsibility lies squarely at the feet of our government..
This is why we need government sponsored single payer. HR 676.
Insurance Co.’s file bankruptcy, deny claims, deny eligibility, deny your healthcare.
This is outrageous! Taxpayers save the company and then those taxpayers who happen to be retired from the company get srewed over by the company.
Bad government trade policy and bad government healthcare policy are the main reason the company got in trouble. The bad government regulation of the financial sector put the final nail in the coffin. Instead of accepting responsibilty and trying to fix the causes, the government and the company punish the retirees.
Outrageous and morally bankrupt!
Gosh, my heart goes out to those retirees who are impacted by this! They appear to be caught up in the wheels of a huge system.
But that system included the management of GM and also the union, when they negotiated all these contracts that really didn’t make good fiscal sense in the long-term. It would have been so much better to had a little less in benefits, and maybe, just maybe, GM would still stand for General Motors and not Government Motors now.
It may not be popular to say, but while GM’s management was largely to blame, the unions have their piece of the fault pie too (along with government policy & systems). The public knows this, and will therefore not be as sympathetic to auto union retirees and workers as they would be otherwise. Unfortunate, but that’s the way it is.
Negotiations are going on at many of the INternational Unions, and the biggest thing on the table is taking healthcare away from retirees and even active members family members. So, why don’t unions practice what they are preaching to the outside world. In my opinion, the Internationals are not there for the people that work for them. I agree with this article, the retires should keep their healthcare, but so should all the union workers at the working for the International Unions. If we are going to fight for this right, then we must fight for it together and keep the promise of healthcare to all union members alive!
WHAT!?!
Do I understand this correctly?
The only way to maintain current CEO pay-rates is to slash the healthcare of retirees? What the f#*k?
When is it time to take to the streets and march with our pitchforks?
Now that Obama is the defacto CEO of GM, and being the compassionate leader he is and all; I am certain he is willing to take a pay cut and/or a decrease in his healthcare as a gesture of shared sacrifice ALL Americans must now endure to get through these troubled times…yeah, right!
Geithner came from the New York branch of the Federal Reserve and it’s clear that he is in tight with all his old banking buddies. GM keeping promises to paying back Geithner’s pals, apparently, is a more important priority than keeping it’s promises to their retirees. It’s easy to take care of your friends when you’re the “decider”, just ask Bush.
CHANGE WE WERE DECEIVED IN! (Should Obama decline to intervene.)
The problem is, the laws are rotten. Law makers pandered to by corporate lobbyists for years. Corporations have proven through out the years that they simply cannot be trusted, especially with fiduciary responsibility.
What’s the solution? Take the “risk” of retirement out of their hands. Make every employer pay into a federal account or a union account if they’re organized. If you work for thirty five years you’re vested at 100% and you’re pension is backed by the federal government.
If the companies want to go bankrupt, let them, but they won’t be able to steal your pension if they can’t get their hands on it. Time is not replaceable. If you’ve got thirty years in and have your pension stolen, you can’t work another thirty years somewhere else and quite frankly, shouldn’t have to!
What ever you retire with should be vested for life. A seventy five or eighty year old should not have to worry about being “robbed” in their golden years.
Comments: 202-456-1111
Switchboard: 202-456-1414
FAX: 202-456-2461
flood the WH phone lines in protest, if our tax dollars are being used, they should at least help retirees, those who worked their tails off for many years. This is not the results they deserve! They should be taken care of, they took care of GM and made them profitable.
Renege
(Or, How Capital and Congress Lied To Working Class Americans)
re•nege:
1. To fail to carry out a promise or commitment
What follows is an extremely abbreviated part of history that is all too often ignored:
Mass production, it was said, would result in lower prices for goods. “Americans will be able to afford products that had previously been too expensive” said the proponents of mechanization. Mass production is, of course, another way of saying automation and technology.
Congress realized that workers, both organized and unorganized, were fearful of losing their jobs due to increased automation. Initially, there was great resistance to mechanization. Congress, for its part, recognized that increased productivity would benefit capitalists. Those lawmakers also realized that without promises of safeguards, resistance to automation would be accompanied by perpetual unrest between labor and capital.
Several laws were enacted that pretended to deal with the concerns of US workers. One was “The Employment Act” of 1946. Another was “The Manpower Developent and Training Act of 1962”. Yet a third was the “Humphrey-Hawkins Full Employment Act” of 1978. All three promised assurances from government that workers would be protected. In practice, none ever delivered on that promise. Labor, therefore, began negotiating certain safeguards to protect workers from unemployment or other hardships due to automation or plant closures.
Congress welcomed those pacts. Business was free to automate, and labor was mollified. Over the years, labor continued negotiating protections, but always from weakened positions due to attrition.
Here it is, 2009. Capital and its apologists in Congress, as we have learned, often practice selective memory loss. Corporate CEOs and ideologically-challenged, coiffed and manicured suits and ties in Washington, D.C. – joined by their trained seals in the media – are saying that labor has to make more concessions. This time it is retirees. Next time it may well be you.
Congress and capital are both reneging on the promises they made years before when they wanted a smooth transition into automation. Those promises did not have sunset clauses. The intent of those promises are as relevant and binding today as they were when they were made. An irreversible motion was put into action when labor took steps to accommodate automation. That action had two components:
1) Workers would be protected against loss resulting from the introduction of mechanization
2) Business would be free to automate within certain limits.
Early on, topics of pre-automatioon discussions included the “likelihood” that labor would actually add workers because mass production would decrease prices for products, thus affording large numbers of consumers at home and abroad the wherewithal to puchase them. Accompanying reduced manpower requirements at semi-automated factories would be the need to build new factories to meet the demands for now-affordable products. In essence, building new factories and increases in overall demand would offset automation-induced manpower reductions it was said.
That model worked for a while. Then, capital began reneging on its part of the bargain. Capital began moving factories offshore to lower wage environs. US capital entered into joint ventures with foreign capital to devise methods to increase profits for both. Congress did little to enforce legislation intended to protect US workers. In some instances it did just the opposite. It passed laws that were and are detrimental to America’s working class.
What would have happened if labor had refused to accommodate automation decades ago? What would have happened if labor had just said “NO”? What would have happened if labor had taken economic action in its battle against automation, or in its fight to restrict the cheap imports that would undercut prices of domestic products? Remember, over 35% of the US workforce was organized back then. Labor had a formidable influence on the affairs of our nation.
Capital – acting through its surrogates in Congress – could have challeneged labor back then had labor refused to allow automation to go forward. Who knows the lengths the capital/government combine would have been willing to go to in order to assure maximum profits for industrialists? It is a sure bet, however, that an organized effort against automation would have resulted in lasting adverse effects on this nation’s manufacturing capabilities.
It is probably safe to say that organized resistance would have severely delayed automation. We’d likely be back in the 70’s or 80’s here in 2009.
A capital/government conspiracy now claims “the global economy” requires even more concessions from workers. In saying that they are again reneging on the post-WWII promises they made.
Should anyone need evidence of the corporate/government double-cross, just look around you. In the 1990’s the richest 1% owned 18% of all the wealth. Today it owns 40%.
Every single national debate has a common thread: The rich are above the fray.
It is a rare event when the children of the wealthy go off to war. The rich get all the medical care they require or desire. Their kids go to expensive private schools. Their mortgage payments are mere blips on their economic radar screens. They never fear unemployment. Security in retirement is a given for them.
The ongoing national debates over Iraq, funding public education, affordable housing, jobs paying family-sustaining wages, access to health care, and Social Security and pensions are being conducted within parameters dictated by the wealthiest 10%. And the majority in Congress support their misdeeds!
Isn’t something wrong when 10% of the population decides the fate of the other 90%?
People can fawn over elected officials. Self-defeating excuses for corporate excesses can be offered. Those with health care can turn their backs on those without. For the time being we can always find people more economically disadvantaged than we are to kick If, however, we collaborate in holding others down with the vain illusion that we’ll somehow be spared their fate, we most assuredly will eventually join them in suffering. Capital knows no bounds. Its insatiable appetite will never be satifsfied.
The only thing that will provide some measure of fairness is a strong labor movement built on a foundation of working class principles; one that demnads an egalitarian society; one that requires the scales held by Lady Justice to be balanced.
Congress and corporate America are both reneging on the social compact they agreed to long ago. Now they’re asking workers to give up more.
If labor allows the double cross to continue, every worker’s head will eventually be on the chopping block. Remember, united we stand, divided we fall!
This is a problem for every union retiree—whether by bankruptcy or bad contract, retirees are always at the mercy of the moment.
If I retired at age 55 after 30 years of service, and earned my health benefits as well as my pension, what guarantee do I have that my health care will continue? None. And if I lose that health care, and can’t get another job? What then? I will join the ranks of the uninsured, because I certainly won’t be able to afford health insurance at my age and with pre-existing conditions.
All us folks who worked hard and earned what we were promised should not have to scramble to cover our losses when promises are broken down the road. But as the breakdowns in the auto industry and the airline industry as of late have shown us, the future holds no guarantee for workers. Who’s next?
There is a huge gap between the reality of retirement age and what the government thinks it should be. We are human beings, flesh and blood, not robots—and after 30 or more years on a physically demanding job, after earning a pension and promised health care, why in God’s name are we expected to cough up what little we have left to keep our heads above water? And especially to pay for something we were promised! Something we earned!
The government seems to think that if I live to see the ripe old age of 70.5, that I’ll get everything that’s coming to me. But if I can’t stay on the job past age 55—what then? What will I do until I’m Medicare eligible? I live in a state that’s already bankrupt! This is the crisis we are all facing. The shortfall where pension and Social Security don’t match up; that fifteen year gap in coverage—that is the danger we face if we lose our health care.
A few facts in response to “it would have been so much better to had a little less in benefits, and maybe, just maybe, GM would still stand for General Motors and not Government Motors now”.
During the 50’s, and well into the 60’s GM sold more than half of all the cars purchased in the U.S. And my-oh-my, wealthy, preferred GM stockholders reaped billions upon billon of dollars in the form of very handsome dividends.
Had those dividend checks been reduced just a tad, and more money put towards funding benefits instead, funding the trusts that provide jointly-agreed to pensions and health care would have been accomplished.
Fast forward to today. Are the heirs who inherited the vast fortunes of their stock holding parents or grandparents being asked to help the “struggling company” by giving back some of the dough they were handed? The answer is a big “NO”! They get to keep every penny they didn’t lift a finger to earn. Only workers – active and retired – are in the crosshairs. The rich will remain rich. It will only be working class people who will suffer. There are no rationale, moral arguments to support such a
double-cross.
Laws in the U.S. favor the rich. Corporations are considered superior to people.
Please, please, stop making excuses for a tiny percentage of our population who consider wealth a birthright. They do not need working class people making excuses for them. They have six and seven figure attorneys and purchased politicians in their employ to do their bidding.
(Take the current health care debate: The medical-profits industry is spending $1.4 million per day and has hired 354 former members of congress or former congressional insiders from both parties to lobby lawmakers. You can bet your fanny that whatever gets passed under the guise of “reform” will keep the status quo in place. And who will suffer thereafter? Hint: It won’t be the rich!)
In his post, Bruce Eggum said we need HR 676. He is, of course, 100% on the money. HR 676 would bring healthcare justice to the U.S. We sure as hell will never get there if some people continue making excuses for corporate/government theft. It would behoove us all to start working together to demand solutions instead of making excuses for the villains who control capital and congress.
It will take work stoppages and protests. Let’s hope they begin sooner rather than later. And let’s hope that enough of us have the backbone to do whatever is needed to win justice.
I don’t think Americans “get it” yet. When you take an ax to the bottom of a tree, the entire tree falls. Same with the economy.
When former President Clinton ended welfare, we ended the one option to accepting bottom-wage jobs, and increased the sort of desperation that convinces people to work harder for less and less.
This has worked even better than expected! Companies no longer complain about the lack of super-cheap labor in the US, and the costs of “being forced” to move our jobs to Third World countries. They no longer need complain about the “spoiled American workers” because there is enough desperation to fill every job and to effectively keep workers in line. Don’t like your wages or working conditions? Don’t like being cheated out of wages? Tough. There’s nothing you can do about it. Go on strike? You’ll be replaced with (involuntary) workfare labor by morning.