By Andrea K. Walker , Sun Reporter|July 16, 2008
When Charles Miller went to work at General Motors' Broening Highway plant in 1954, he was attracted to the company by its reputation for good salaries and stellar benefits.
He stayed for 31 years. Since he retired from his job as a data processor in 1985, he has gotten health coverage from the automaker, which helped pay for his heart surgery last year.
But now the 77-year-old Perry Hall resident and thousands of other white-collar GM retirees and their spouses or survivors, including hundreds in the Baltimore area, are losing that.
The automaker, hemorrhaging sales in its core U.S. market, announced yesterday deep cuts and other actions to raise cash that would generate $15 billion in savings through 2009. Among the casualties: health benefits for salaried retirees 65 and older.
GM is the latest big company to abandon retiree health coverage, though it will continue to pay for those younger than 65. Thousands of Bethlehem Steel workers in Baltimore and nationwide lost coverage after the steelmaker went bankrupt in 2003. General Growth Properties Inc., the Chicago real estate giant that bought Columbia developer Rouse Co., dropped company-paid health and life insurance for Rouse retirees in 2005.
And in March, the Supreme Court made it easier for companies to reduce health benefits for millions of retirees who turn 65 and become eligible for Medicare by turning away a legal challenge from AARP. The advocacy group had argued that lower benefits for older retirees amounted to age discrimination.
Eliminating retiree health coverage for those 65 and older was just one part of GM's latest cost-reduction plan. The automaker also said it would cut its white-collar expenses by 20 percent in the United States and Canada, slash thousands more blue-collar jobs by cutting truck production, sell assets and suspend its dividend for the first time since 1922.
Retirees worry
Yesterday's announcement has left retirees on fixed incomes like Miller wondering how they will cope when they lose their benefits in January.
GM said it will increase pension payments by $300 a month with money from its overfunded pension plan to help compensate. But nobody knows if that will pay for everything.
"They've been cutting for years, so I sort of knew this was going to happen someday," Miller said. "But I was hoping it would take longer. We're probably going to have to cut back on the amount of insurance coverage we have."
