GM Retirees Want a Say in Benefit Cuts

From Bloomberg News

General Motors Corp. retirees are asking the United Auto Workers union to reconsider backing a plan that saves the automaker $1 billion a year in part by cutting their benefits. Ford Motor Co. workers said they were considering a similar appeal.

GM retirees didn’t get to vote on the union’s decision to support the plan and they should have, Bob Foster, a retired GM worker who sent the request to the UAW, said Friday.

The GM plan forces retirees to pay out-of-pocket healthcare premiums for the first time. Active workers at GM, the world’s biggest automaker, approved the proposal Nov. 11.

“It’s certainly representative of the discontent that’s out there,” said Harley Shaiken, a labor professor at UC 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 Rick Wagoner as he tries to end the $3.9 billion in losses posted over the last four quarters. Wagoner is counting on healthcare concessions, job cuts and plant closings to reduce Detroit-based GM’s North American expenses by $7 billion annually by the end of next year.


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

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, retirees who currently pay no premium would pay a maximum of $370 a year.