Health care proposal angers ex-GM workers

UAW supports having retirees pay premiums

December 31, 2005|By BLOOMBERG NEWS

Some General Motors Corp. retirees, angry that they did not get a say, are asking the United Auto Workers union to reconsider its support for a plan that saves the automaker $1 billion a year in part by forcing retirees to pay out-of-pocket health care premiums for the first time.

"They can't pull the lever for us," said Lorna Foster, 66, whose 68-year-old husband, Bob, sent a letter Dec. 12 asking the union to let retired workers vote on retiree concessions. "We're working our fool heads off trying to get them to turn this around. America's manufacturing workers are becoming like members of the Third World."

Leroy McKnight, a retired worker from a Lansing, Mich., GM stamping plant, has filed a suit in U.S. District Court in Detroit asking that the UAW not be allowed to negotiate on his behalf to reduce his health benefits. Under the plan, individual retirees that currently pay no premium would pay a maximum of $370 per year.

The appeal by Foster, who retired from a GM stamping plant in 1993, would be considered as part of an internal union process.

"It's certainly representative of the discontent that's out there," said Harley Shaiken, a labor professor at the University of California, Berkeley. "The retirees are frustrated, but I don't think it represents a major threat yet."

The dissension adds to challenges for GM Chief Executive Officer G. Richard Wagoner Jr. as he tries to end the $3.9 billion of losses posted over the past four quarters. Wagoner is counting on health care concessions, job cuts and plant closings to reduce Detroit-based GM's North American expenses $7 billion annually by the end of next year.

UAW spokesman Paul Krell declined to comment on Foster's request. U.S. Judge Robert Cleland ruled Dec. 22 that UAW and GM had done a reasonable job of protecting retirees' interests.

If a judge supports McKnight, it will "change the dynamics considerably," Shaiken said. Historically, active UAW workers have been reluctant to cut retiree benefits because many are near retirement age or have parents and other relatives who are union retirees.

The UAW and Ford, the second-biggest U.S. automaker, agreed to a health care plan similar to GM's on Dec. 10. The agreement cuts Ford's health care costs by $850 million a year. Only 51 percent of Ford's UAW members approved the accord.

Ford workers may file a similar appeal asking that Ford retirees get to vote on the proposal, said Ron Lare, 58, an active member of UAW Local 600 at the automaker's Dearborn, Mich., Rouge complex.

GM and Ford retirees, active members and others will meet again Jan. 7 in Flint, Mich., to discuss the issues, said Ellis Boal, a Charlevoix, Mich., labor attorney who is helping to coordinate the protests.

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