Retirees divided by dispute over automakers' health-care benefits
DETROIT (AP) - Retired autoworkers who spent decades together on assembly lines and picket lines find themselves facing off in a dispute over health benefits.
Some support an effort by General Motors Corp. (NYSE:GM), Ford Motor Co. (NYSE:F) and the United Auto Workers to require retirees to pay several hundred dollars more each year for their health care, saying it's necessary to stem the automakers' staggering losses. But others say GM, Ford and the union are breaking their promises and trying to stifle retirees' objections.
"It kind of upsets me that they're playing a shell game and they're only giving the information they want to give," said Larry Bronson, 70, who worked at Ford's historic Rouge complex for 42 years until he retired in 1998.
Under the proposed agreements, GM and Ford hourly retirees would pay deductibles, premiums and co-payments for the first time, up to $752 US annually for families and $370 for individuals. Those amounts could rise in the next few years depending on the amount of money in two new trust funds that will be used to reduce payments.
The agreements require active hourly workers to contribute a percentage of future pay increases to the trust funds. GM says it will put $3 billion US into its fund by 2011, while Ford says it will contribute $108 million in the same time period. DaimlerChrysler AG's (NYSE:DCX) Chrysler Group is seeking a similar deal with the UAW.
Active workers at GM and Ford already have approved the settlements, but the automakers need U.S. federal court approval before they can take effect. U.S. District Judge Robert Cleland considered objections from GM retirees last week and is expected to rule on GM's agreement later this month. Judge Arthur Tarnow will consider objections from Ford retirees at a hearing scheduled for May 31.
Bronson plans to attend the Ford hearing to voice his frustration. Bronson, who lives in Lapeer County's Marathon Township, said he has a condition that will eventually require a costly back operation, while his wife is on oxygen for a pulmonary blockage and takes 20 different medications each day.
"I'm going to have to do without to make those payments," said Bronson, whose Ford pension totals $20,000 US a year.
But so far, it appears relatively few retirees share Bronson's opinion. Out of the 476,000 GM retirees and dependants who received notices about the changes, just 1,250 filed objections that could help persuade the judge to reject the settlement. Ford began sending out notices to 150,000 retirees and their dependants last week and Ford retirees have until April 28 to file an objection.
Bonnie Lauria, 64, a GM retiree from West Branch, says most retirees support the agreements because they feel they've been fortunate to have generous benefits for so long. Lauria worked for GM for 28 years before retiring in 2000, and she also has an annual pension of $20,000 US. Lauria's son, a GM millwright, was one of the active workers who approved the agreement.
"Let's face it. Nobody likes to pay extra for anything they've been getting, be it gasoline or milk," Lauria said. "But if you look at the alternative, having no insurance at all, I think it's a very small price to pay."
Others say plenty of people opposed GM's agreement but didn't know they had a right to object because the 80-page explanation sent to them was written in confusing legal language.
Leroy McKnight of Haslett, who worked for GM for 30 years before retiring in 2001, drew cheers from a crowd of union members at a recent hearing when he called the document "psycho-babble." The explanation included a 42-page summary of the settlement and a 20-page notice from the court about retirees' rights, including the right to object.
Attorney Mark Baumkel, who represents GM and Ford retirees opposing the agreements, said he got calls from hundreds of GM retirees who didn't realize they could object until too late in the process. Baumkel said it's important for retirees to understand their rights because if the settlement is approved, they won't have the ability to opt out and sue on their own.
"They just didn't fully appreciate what this thing was. They got it and it just seemed like another mailing from the UAW or GM," he said.
But William Payne, an attorney representing retirees who support the agreement, said retirees got a brochure with highlights of the changes and at least 500 people called a toll-free number to ask questions. Local UAW leaders also held meetings to explain the changes.
Lauria said few retirees complained at the meetings she attended. She said they know GM needs help because they pass shuttered plants every day.
"Once they understood that GM was in trouble and we could all be in trouble, they said that they didn't want to pay but they'll pay," she said.
Baumkel doubts the UAW and automakers made it clear that retirees could object. In one case, Baumkel said Mike Sheridan, the president of UAW Local 95 in Janesville, Wis., refused to let him talk to General Motors retirees by phone during a meeting to explain the changes.
Sheridan said Baumkel called unexpectedly while he was in the middle of presenting the information.
"Obviously I'm not going to have him interrupt our meeting to talk to our retirees. I didn't know who this guy was when he called," Sheridan said. He said that out of about 4,000 retirees in the local, only about three or four have been interested in talking to Baumkel.
"The bottom line is we have a very well-educated work force. The retirees are the same way. They see it for what it is. They understand it," Sheridan said. "Times are what they are. Health care costs are rising rapidly."
Bronson says he hopes the Ford hearings will be different, and that longtime UAW members won't be afraid to challenge their union.
"We used to be pioneers in all this stuff," Bronson said. "Everybody I talk to feels like we've been sold out."
