By KEN de la BASTIDE
Tribune enterprise editor
June 23, 2009 11:43 pm
—
Several hundred retired United Auto Workers members learned how the union has battled to protect their benefits as General Motors goes through bankruptcy proceedings.
Mo Davidson, Region 3 director for the UAW, addressed the retirees Tuesday at Memorial Gymnasium. The information wasn’t new to most of the retirees, but it confirmed their thoughts on their pensions.
“Hallelujah for Kokomo,” Davidson said of the news that GM was taking back the local Delphi facilities. “We’re working hard to get Delphi back under the GM agreement.”
GM said it was purchasing four Delphi plants, including the one in Kokomo that it spun off in 1999.
Davidson said there have been changes in health insurance coverages, which he called temporary with hopes of restoring them in 2012. But the retirees’ pensions were protected.
“GM was holding its own until $4 gasoline and the collapse of Wall Street,” Davidson said. “There have been comments that the UAW was making cars people didn’t want to buy. The UAW was building exactly what the American people wanted: trucks and SUVs.”
Davidson said GM was asking for a federal loan similar to one provided to Chrysler in the 1980s. The loan to Chrysler was repaid, and taxpayers received $300 million in interest.
The UAW started negotiating with GM right after the federal government asked to see a restructuring plan for a loan, approved in December, to get the company through the end of 2008.
“Initially GM wanted to terminate the pension plan and cut off health care funding for retirees,” Davidson said.
The UAW established a VEBA (Voluntary Employee Beneficiary Association) in 2007. That cannot be dissolved, but the amount funded by the company can be negotiated, he said.
Davidson said UAW retirees’ health insurance is covered by GM until Jan. 1, when it will be switched to the VEBA. He said the UAW will receive half of the funds in cash and half in stocks, which should become profitable in 2012.
He explained GM will provide $10 million to the VEBA, but that isn’t enough to cover the retiree health insurance costs.
“We wanted to look at the medical benefits we can keep,” Davidson said, “with the least amount of pain. This is not pretty, but it’s better than having the pension plan terminated.”
Retirees will be required to pay either $11 or $23 per month for health coverage, cost of prescription drugs will increase, vision and dental care will end on July 1, and Medicare Part B payments will end.
Davidson said it was the first time retirees were asked to pay health insurance costs.
“We hope to recover those benefits after we can sell the stock,” Davidson said. “These benefits are temporarily rescinded. Our intent is to bring benefits back to retirees.”
Davidson said GM agreed not to terminate the pension benefits because it wanted the UAW’s help in securing the loans from the federal government.
“You have health care, and we protected your pension,” he said of UAW negotiators. “We did the best we could with what we were dealt.”
Kokomo resident Jim Hicks, who retired after 34 years of employment with Delco Electric, said the $23 per month for health insurance coverage is worth it.
“We saved our pensions,” he said.
Lezlie Andrews said she wasn’t surprised at what Davidson said.
“We’re not uninsured,” she said, “and our pensions were saved. That’s a good thing.”
Andrews said it sounded like the union leadership did the best it could for the members.
Belinda Washington, who retired in 2006 after 31 years of employment, said she expected a cut in health insurance coverage. The important thing, however, was protecting the pensions, she said.
“I knew it was going to happen,” Washington said of the health care changes.
She was concerned about health care coverage she provides for one grandchild, which could change.
• Ken de la Bastide is enterprise editor for the Kokomo Tribune. Contact him at (765) 454-8580 or ken.delabastide@kokomotribune.com.
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