 |
|
James Parks of our AFL-CIO Now blog staff brings to light below an issue the traditional media is ignoring: How the Treasury Department is breaking the promise of retiree health coverage for tens of thousands of workers at GM.
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 202-456-1212 or send an e-mail to president@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.
Related posts:
Spotlight
Support this site!
Subscribe to the newsletter
Advertise on Firedoglake
Send
us your tips
Make us your homepage
About Firedoglake
Advanced search
Social contract? What social contract? WTF do these brilliant business folks think the retirees are going to do? It is especially egregious that management gets to keep all their benefits.
Yeah, I saw something earlier this week that the former CEO is retiring with “only $10M”
Blame it on the guy in trouble for pay2play.
In an update, the Treasury Secretary clarified the situation by saying that the retirees will maintain their lifetime benefits; however, ‘lifetime’ is being redefined as 4 years or 48,000 miles, whichever comes first.
Eliminating the “legacy costs” of the auto industry has been the singular goal of the oligarchs for decades.
They have set in motion a downward spiral in wages, in care, in life expectancy – for mankind.
Who did?
David Rockefeller did. The traitor.
I do not understand how these rulings could be made with out the afected parties having been given the opportunity to make their presentations.
But the Slave Masters of the Universe are doing purty darned well, and that’s all that counts.
USA! USA! USA!
Welcome to the consequences of years of Republic control of government. It can’t be cleaned up in just a few months. Elections have consequences and, when Republics are elected, those consequences are bad.
…too funny, but sadly I suspect that may be closer to the truth than anyone cares to admit.
And no, this is not the change anyone voted for, robbing employees of their promised health care. I would be willing to be that if in when 1992 HillaryCare was rolled out anyone had told GM and their employees that they would be in this position today because of “Harry and Louise” they might have worked against the alleged “Health” Insurers a bit more vigorously.
But it was far more important to worry about cattle trading, Vince Foster, blowjobs and impeachment… health care, who needs it?
gobsmacked (yes, i know i shouldn’t be).
thank you for this important and infuriating post.
will call tomorrow.
Wagoner gets money for the rest of his life and the retired workers get nothing. Thank goodness, Rattner is facing legal problems in NY.
The new “auto czar” is supposedly someone with a labor background. Maybe some of the folks who know him can facilitate the Obama administration coming to its senses.
Thanks so much, Selise!
The brilliant business folk don’t care. They want the retirees just to go away, and their job is to design policies that’ll ensure precisely that happens.
Wagoner’s luxurious retirement bennies and comp package (basically $10 mil PLUS $75K per year FOREVER plus lots of other bells and whistles) is explained here http://www.latimes.com/busines…..5838.story
Not bad for the guy who ran one of America’s greatest companies into the ground.
Treasury honours management contracts but shitcans labour contracts. Way to go, Geithner. Did Summers whisper in your little ear that this was the way to go?
Now hold on one gosh darn minute.
Even columnist Ruth Marcus at the ultraliberal Washington Post
agrees that, unlike AIG executives,
auto workers really aren’t owed their pensions and health benefits:
Don’t be silly. Auto-execs are under the AIG plan, not the auto-worker plan. The Fundie Old Testament says so. /s
Somebody is going to end up with the pension assets too and it isn’t going to be the beneficiaries.
Essentially when this is all over 90% of all the money that has been put into pensions of all kinds and SS will either disappear or end up in the hands of the Pigmen. This was always going to be the result. From the day in the early 60’s when the asset holding class understood that all that pension money reliably rolling into Wall Street would inflate asset values the game was on with the understanding that someday they would end up with what was left. The Tax advantaged retirement plans were the same thing. A subsidy to bid up financial assets. For SS when Greenspan and the politicians redesigned the system they made sure the surpluses would not go into fungible Treasury securities but rather intergovernmental IOUs which could eventually be declared not a liability afforded “the full faith and credit of the US” per the constitution. There is no way those IOU’s will be paid. None. Zilch. Nada.
Every bank which has ever existed has eventually gone bankrupt. There are a couple that are quite old but not ageless and are oddities. Giving money to someone else always results in them taking a good fraction of it for themselves. This is how the world works.
There is nothing to government can do to bring back what has been lost in financial assets. What they are doing is giving what’s left to the con men and thieves who took the money and ran away with it when times are good. There is no way to overstate the political and policy disaster this White House is over seeing.
Thanks for this, Tula!
Does rather illustrate the need for a public option, because there are several thousand more people without health care, who were promised it, bargained for it and accepted lower current wages in exchange for a deferred long term benefit.
And now the company that promised it – and which paid current bonuses to top executives for having saved the company short term costs by promising long term benefits instead – is saying tough, can’t help you. If you tried to skip out on your bookie like that, you’d need new kneecaps.
A responsible Congress would promptly amend the bankruptcy laws. Among other items, they would close this escape hole, and the one used to trash labor contracts, by not making them throwawayable via a “strategic” bankruptcy. But we needn’t wait for that responsible Congress, as it seems a bit behind Godot in arriving at the bus stop.
We do have, however, a Congress about to legislate health care reform. Which seems the perfect way to take care of a large segment of the population’s need for health care, in spite of the ruthless corporate behavior that exacerbates that need. Seems to me a few of those former GM employees and their friends might make calls or stop in at their local Congresscritter’s pup tent and snake oil show and let their voices be heard.
Another reason why my next car will be a Ford Mustang. Hopefully, the administration won’t force them into bankruptcy because they played by the rules.
Thanks so much for sharing this important story. Every time I think I can’t be any more disillusioned by the Obama administration, something else comes up. I’ll be writing to them tomorrow about this.
Thanks for this Tula.
The shameful way the unions have been treated in all of this makes me really angry. I think a lot of people are going to have a very long memory about all of this and it could end up hurting businesses. It gets into one’s spirit: I was looking for a new stair-railing the other day and I realized I will never be able to buy anything from China again, for goddesses’ sakes it could be radioactive (like the drywall) and it’s no joke.
It’s not a union story, but we’ve got our own local horror show happening up here in Ottawa. As the jewel of Silicon Valley North falls to the cruel ways of the evil corrupt moneymen, the remaining Nortel employees who stayed through ALL the layoffs are being stripped of their severance rights and all pensions are being dissolved by the bankruptcy proceedings. It’s horrifying. And it’s so cruel. And an incredible breach of trust by OUR governments.
People really have to start reacting to all of this, like buying Fords!
oh the pitfalls of capitalism that has led us to imperialism and then to bankruptcy
and we whine like babies and continue to support imperialism around the world and a mega military budget like the world has ever seen.
ie one trillion in iraq and soon one trillion in afghan
hey big three think we could have spent that money on your retirement? oh but we love our wars and super power status.
the kick ass mentality of we americans has come home to roost and the rest of the world loves it.
the bully finally goes down
oh the price of imperialism it hits home now as most people have lost one third or more of their retirements.
but hey now the iraqis love us. yea right we have created a whole new nation of terrorists.
this fits right into the industrial military plan as we must always have a war or threat of war. war on drugs, poverty, and the big one the war on terrorism, war on crime, etc.
but hey now we can steal the iraqi oil with our iraqi puppet gov for the benefit of big oil
with communism man exploits man with capitalism it is the other way around.
how long will it be before americans figure that one out?
we cheered when communism failed not realizing we were next.
we are a failing state but our politicans tell us it is just a recession and most americans believe them.
really why would we. look who they bailed out first. ie wall street and griped and moaned about the big three bailout.
with capitalism the rich take care of the rich first. ie wall street bankers got the big bucks.
now americans line up to vote for your capitalist politicans so they can do you good.
What is more important is the wealthy of this country needs help. As T.A.R.P..
Most of us peons should try very hard to understand that they are the American roalty. They are wealthy because their God blesses them and not you.
Sarcasm aside,
If the media could put out pressure on congress that they are recieving public funded health care. Keeping the pressure on could be helpful. Threaten something as congress’s benifits as their health care. Because as people (tax payers) lose their jobs, health care, home(s).
Congress has enough time on their hands to have affairs and live high on said tax payers in such a time of economic stress……