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Highlands Today

When A Promise Isn't Kept

Kathy Waters/Highlands Today

From left: Philip Barnes, Robert Turner, Joe Oros and Bill Allen all retired from American auto companies. They met Thursday to talk about their health insurance and life insurance benefits.

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By GARY PINNELL

Highlands Today

Published: August 22, 2008

SEBRING - At the end of the interview, it was time to get their pictures taken.

"Don't put me in front of a Ford," Bill Allen protested. He retired from GM in 1987, but his brand loyalty still shows.

However, even Allen, a white-collar worker for decades, isn't so happy with what General Motors is doing with his retirement benefits. He's checked. If he wanted to replace his health policy, it would cost $790 a month. That wouldn't include his wife.

But it will exclude pre-existing illnesses, and Allen is a diabetic.

Too Many Retirees

In the 1950s, when current retirees were rookies at the Big Three Automakers, the average lifespan for an American man was 65.5. Today, it's 78.

GM, says Robert Turner, has about 442,000 retirees. Turner, who lives in Sebring now, also retired in 1987. No one knows how many retired autoworkers live in Highlands County, but there's enough to have a chapter of the United Auto Workers here, of which Philip Barnes was a member.

GM, Ford, Chrysler, even Nissan have reduced retiree benefits over the past three years. It's a signal to other workers - retired or still on the job - that nothing is guaranteed, including pensions, life insurance and health insurance.

Last year, Ford eliminated health benefits for Medicare-eligible retirees who drew a salary. Instead, they get an $1,800 stipend that may be used for Medicare and other health-related costs.

GM announced last month that beginning in January, medical coverage for former employees would cease.

In March, Chrysler retirees learned that company-funded life insurance policies would vanish. Retirees could have, if they wanted, a one-time pension payment of $4,000.

Joe Oros, 78, who worked for Chrysler until retirement in 1986, was sent a form letter. He could buy life insurance with that $4,000. But first, he had to fill out a questionnaire:

Has he had cancer? Yes. High blood sugar? High blood pressure? Yes. Arthritis? Yes. Heart problems?

"Yeah. I've had all that," said Oros, who drives a big Dodge truck. "So I just called Metropolitan Life, and asked them if there was really any reason to fill this out. The woman was honest with me, and she said, 'No. Forget it.'"

And even if he did buy the life insurance policy, with several exclusions, the company won't pay if he dies within three years.

No Options

"It makes me feel helpless," said Barnes, who made Fords and drives a Mercury Grand Marquis. "They're doing this with the blessing of the union."

Why would the union let the Big Three automakers reduce the benefits of retirees?

"They forgot to let us vote," replied Barnes. "I'm technically not a member anymore. I don't still pay my union dues. It was only $2 a month."

Among the four retirees interviewed Thursday morning, Barnes was the only hourly employee. The other three were salaried, white color workers.

"I just hope what they're doing saves the automakers in America," said Turner.

"Canada and Germany own Chrysler," retorted Oros.

The Big Three are drowning in red ink. Ford lost $2.7 billion in 2007. Chrysler lost $3 billion. GM lost $38 billion.

Retirees are part of the problem, according to the Big Three. GM estimated that retiree health care benefits alone add $1,600 to the window sticker of every Chevrolet, GMC, Oldsmobile, Saturn, Buick, Pontiac and Cadillac made in America. And GM provides benefits for 1.1 million workers, retirees and their families.

"I have to die by 2017, or they are going to reduce my death benefit to $15,000," said Turner, 74, with a grim chuckle. "It's $40,000 now."

Barnes doesn't believe everything Ford says. "They said we made $28 an hour. But they counted everything in our salaries: gloves, Kleenex, toilet paper, gloves. They just did that to make us look bad."

Union Advantage

The irony at this table is that Barnes, the blue-collar hourly worker, has far better benefits today than the three white collars to his left. His co-pays have risen, but from $2 to $7. His deductible is $500. He estimates Ford's reductions cost him $1,000 a year.

"They're still paying for my life insurance," he said.

Turner has to pay $20 for generic prescriptions, and up to $150 for cutting-edge biotech drugs.

"But it's all gone after the first of the year," said Turner. GM will send him and Allen a letter in mid-September, detailing the changes. They think they'll get $300 a month to replace those benefits.

"That's not a shadow of the cost," Turner said. Allen believes he may have to pay from $1,200 to $2,400 a month for the benefits he'll no longer receive in January.

The day Oros retired 22 years ago, Chrysler sent a letter informing him that he would have $101,000 in life insurance. Now, instead of life insurance, he can add $42 a month to his pension. He believes he's losing thousands of dollars in benefit every year.

What the Big Three are doing is legal, Turner and Allen agreed. Retirees and the unions sued years ago. Two lower courts sided with the workers, but the Supreme Court allowed GM to cut benefits.

Barnes and Oros aren't so sure. They believe Ford and Chrysler did violate a promise to provide health and life insurance.

"A verbal promise," Barnes said.

"I've got it on paper," Oros threw in.

"We spent every dime we had to get the kids through college," said Turner. "So we're poorly prepared to go on without insurance benefits."

"You can't live without insurance," Allen agreed. "If you don't have insurance, you've sold the farm. They'll take your home. They'll take your stocks and bonds. You won't have anything."

Gary Pinnell can be reached at gpinnell@highlandstoday.com or 863 386-5828

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