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AARP: UAW Retirements Underfunded

A bit of dictation from the UAW via the famously non-partisan (and non endorsing) AARP:

AARP.org

GM Retirees Ask, ‘Who’s Watching Out for Us?’

Contract between automaker and union calls for severe cutbacks in health care

By: Carole Fleck | Source: AARP Bulletin Today | June 4, 2009

If your General Motors vehicle has doors that close smoothly, you can thank Gethin Jones and his colleagues for that. Jones worked on the assembly lines at six plants over 33 years, assembling cars and repairing any defects before they made their way to a sparkling showroom.

“When the doors close nice and they don’t make a funny sound, I’m the guy who did that,” he says.

Jones, 56, retired from a GM plant in Georgia two years ago and moved with his wife to Fort Myers, Fla., where his pension check would stretch farther because the cost of living was less expensive.

Now, as the nation’s largest automaker filed Monday for bankruptcy protection, Jones will be relying on his pension to stretch farther still. He and 485,000 other retirees and their families face cutbacks in health care coverage, including the elimination of dental and vision care and an increase in prescription drug costs. The cuts were included in a contract between GM and the United Auto Workers (UAW) that was ratified last week.

Perhaps more disturbing, the union contract allows GM to replace more than half of the $20 billion it owes to the retiree health care trust fund with stock—the value of which remains as uncertain as GM’s future—and with a $2.5 billion note. The UAW acknowledged that funding the plan with GM stock will “greatly increase the risks being assumed by retirees.”

“Depending on the value of the company’s stock, the trustees of the retiree health care trust fund may have to make further reductions in benefits in the coming years,” the UAW said on its website.

Health Care Plan Underfunded

The plan (known as the voluntary employees’ beneficiary association, or VEBA), which is headed by an independent body and run by the UAW, pays for the health care costs of GM’s retirees and their spouses. According to a White House fact sheet on GM’s restructuring, the VEBA plan will also get 17.5 percent of the equity of the newly organized company and rights to purchase an additional 2.5 percent of the new GM.

Still, given the underfunding of the VEBA plan and the uncertainty of the value of GM stock, cuts to health care plans are most likely “just the beginning” for GM retirees, says Ellen O’Brien, a strategic policy adviser at AARP’s Public Policy Institute.

“The trustees of the plan are going to be faced with tough choices over the next few years about whether to cut benefits and shift cost to workers to extend the life of the fund,” she says. “The cuts are going to be especially painful for low-income retirees for whom comprehensive health benefits are key to their financial security.”

Paying out of pocket for dental services and treatment, including dentures, crowns and cleanings, will most certainly eat away at retirees’ pension and Social Security income because Medicare doesn’t cover those expenses in most cases. Nor does Medicare cover eyeglasses, eye exams or other related treatment for those 65-plus. Those services can be extremely costly for people on a fixed income, advocates say, and vital to older adults’ health and well-being.

Not surprisingly, many retirees say they’re frustrated with health care cutbacks that result from union contracts they don’t get to vote on. At a televised roundtable discussion in Detroit involving retirees, one man accused the union of failing to represent retirees’ best interests.

UAW President Ron Gettelfinger takes issue with that. “The UAW has a proud history of looking out for our retirees,” he told AARP Bulletin Today. “In accordance with our constitution, retirees do not vote, but that does not mean we do not represent them.”

He says that all stakeholders at Chrysler and General Motors, including active and retired UAW members, were required to make sacrifices. “We did the best job we possibly could under the circumstances,” he says. “Pensions are protected, and core retiree health care benefits remain intact. We did this to secure government funding for the automakers to keep them from liquidation, in which case our pensions would have been reduced and retiree medical coverage would have been terminated,” he says

The health care reductions to GM workers, slated to take effect in July, were similar to those facing 144,000 Chrysler retirees after it declared bankruptcy in April. After a revised contract between Chrysler and the UAW, retirees saw cuts in dental, vision and drug coverage…

On the bright side, GM retirees won’t have to worry about their pension plan, one of the largest in the nation, at least for now. It will remain ongoing for more than 670,000 current and retired workers, says Jeffrey Speicher, a spokesman for the federal Pension Benefit Guaranty Corp. (PBGC), which insures such plans. But like its retiree health care plan, GM’s pension plan, with $80 billion in assets, is underfunded by $20 billion as of last November, he adds

Retirees worried about the future of their benefits have flooded the telephone lines at some of the nine UAW retiree chapters in Florida, including the office headed by Fred Fabi in St. Petersburg. He says an estimated 40,000 GM retirees live in the state.

Fabi, 82, who worked as an inspector and test driver for GM, says some retirees struggling to make ends meet will likely move in with their adult children as a result of the cutbacks. Others will face decisions about whether to buy food, fill prescriptions or see a dentist.

“People will just go without,” [UAW retiree phone bank operator] Fabi says. “They won’t have a choice. They won’t be able to get dentures. They won’t have enough money to buy prescriptions and food. They’ll have to make an honest decision on where those few dollars they’re getting are going to go. It’s demoralizing. We deserve better.”

Of course this is exactly why the $10 billion bailout to the UAW was hidden included in the ‘Healthcare Reform’ bill.

The UAW and the AARP say ‘jump,’ and the Congress meekly replies, ‘how high?’

This article was posted by Steve on Tuesday, August 25th, 2009. Comments are currently closed.

15 Responses to “AARP: UAW Retirements Underfunded”

  1. GetBackJack says:

    We are being ruled by some sort of non-human alien virus.

    A smart virus knows how to feed without killing its host.
    A dumb virus – like HIV – kills its host.

    We’re dominated by a very smart virus.

    • proreason says:

      don’t you mean we are being dominated by a dumb virus?

      The UAW just finished killing the auto industry.

      Wall Street has killed much of the financial industry.

      And the Moron’s Criminal Cabal is in the process of killing the country.

  2. Liberals Demise says:

    UGH!!!

  3. Right of the People says:

    First off, he retired at 54! Must be nice, I’ll be working until I’m at least 65 and more likely it will be 67 or 70, boo hoo hoo.

    It is kind of funny that they’re getting GM stock, I guess if you need something to line your bird cage with it would be okay.

    I’ve unfortunately known a number of UAW workers mostly through my wife’s best friend who both her and three of her sisters married some of them. Their attitudes towards work and management are disgusting. Many were the times when they all would get together at some family gathering we’d been invited to and talk about whose turn it was to go on strike that year. One worked at Chrysler, two at Chevrolet and another at Ford. I would listen as they talked about how when on 2nd shift half of the people on the assembly line would cover for the other half to climb the fence and go to a bar across the street. The next night they would swap places. I heard all kind of stories about workers doing stuff like putting a note in a bottle then sealing the bottle inside of a fender well or rocker panel. The note would say something like “Ha, finally found me!” that I’m sure some tech at a car dealer went crazy trying to find the source of an annoying noise.

    To me, the UAW optimizes what is wrong with unions in general. Maybe these folks in the article can contact their boy Barry who I’m sure they voted for and and get stimulated.

    10-7

    • U NO HOO says:

      I found an order of toast in a waxed paper bag in the rocker panel of our ’70 Torino when I had the back seat out to look for one of our children’s toys or crayons or whatever they lost.

    • MinnesotaRush says:

      I’ve overseen warranty work on these vehicles for many years and have found all kinds of surprises hidden thru out these cars. The booze bottle placed into the frame rail was hard to locate because it was hidden IN the rail (not too visible at all) and rolled from front to back when the car started to move and then stopped.

      And yes .. it was a booze bottle .. placed there by some “bored” and mischievious autoworker. What’s it say for what they get by with (?).

    • curvyred says:

      As you have stated with such eloquence: boo freaking hoo.

      I will also be retiring at 67 and1/2 or later without company provided health care of any kind, although I will have medicare – lol whatever that will be by the time I get there.

      I have little sympathy for these overpaid workers.

  4. pdsand says:

    The delicious irony, after all these years of the adversarial relationship with ownership, now they are the owners. And of course ironically, they will continue to strongarm and kneecap themselves. I wonder how well that’s going to work out for them.

    • catie says:

      I hope not long. I also know some UAW folks and my uncle is a “negotiator” for the AFL-CIO. He’s always threatening to send his union thugs around my house. He’s almost 80 & I think he’s probably half serious too. I can’t even talk to him anymore. It’s a shame because he was always my favorite Uncle.

    • Liberals Demise says:

      What?
      He hasn’t been offered the “BOOK” ?

  5. U NO HOO says:

    “He hasn’t been offered the “BOOK” ?”

    Ah, yes, the “BOOK”.

    To have the “BOOK” means up yours, I’m outta here, 30 and out, bye bye, sayonara, da svidanya tovarisch.

    Cry baby union guys should have gotten a job with the federal government!

    Or voted libertarian!

  6. MinnesotaRush says:

    “If your General Motors vehicle has doors that close smoothly, you can thank Gethin Jones and his colleagues for that”. NOT!

    You can thank American ingenuity and the engineer who built and designed the machinery in the assembly lines that put most of that car together for that. It’s amazing to know that the “human touch” is pretty minimal in the assembly of these things we chase down the highway at 65 + mph.

    I spent years working with GM and have seen a plant or two. The job I’d want would be the tire installer. The car moves down the line to him. It stops as is predetermined so that he can take the tire and wheel assembly off the chute it rolls down to him; so that he can then simply place it on the car (at waist high height – the car is elevated to accomplish this – he doesn’t have to bend or squat down) and spin the lug nuts tightly onto the vehicle which is done by an air wrench with all 5 lug attachments. He only needs to place the tool in position and hit the trigger. The operator doesn’t move more than 3 feet if that. He turns, grabs the tire and wheel, puts it on the car, and hits the air wrench trigger. Robotics could do that, too.

    The burnt out with (most of) the UAW (hate to use the word) “workers” .. is boredom.

  7. Oracle says:

    I worked a strike once replacing sidewalk pacing Steel Worker union folks at a rubber plant in Lincoln, NE.

    Untrained sales people out-produced the plants best shift within a week.

    Trick is you do what is necessary even if it’s “not your job.” And you don’t take break every 45 minutes.

    The plant found that if you actually “work” stuff gets done. Imagine that.

  8. canary says:

    Amazing Ronald Reagan mentioned the auto unions wanting govt paid health care. As a whole unions in America do not fight for retiree’s health benefits.

  9. canary says:

    AARP officially endorsing Health Care Bill. Just caught drama commercial by AARP and telling people to ignore the myths, and support the Health Care Bill. Gave a new website HealthActionNow.org.


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