IUE-CWA Reaches Agreement on GM Health Care, Delphi Pensions

DAYTON – IUE-CWA has reached a tentative agreement with the New General Motors to provide baseline security for retirees who are facing the loss of health care and pensions.

Under the agreement, pre-65 retirees covered by General Motors insurance will be offered an improved package with an extra $50 million in payments, on the high-deductible coverage originally presented.  Post-65 retirees will retain a $1 billion claim with old GM, now known as Motors Liquidation Co.

The agreement also secures a "top-up" from New General Motors for Delphi retirees whose pension was surrendered to the Pension Benefit Guaranty Corporation.  Because of that action the former Delphi workers stood to lose half of their income without this agreement.

"We were faced with very difficult decisions," said IUE-CWA President Jim Clark.  "Everyday we hear from severely ill retirees who would literally face a death sentence with the loss of health care and from retirees who would face bankruptcy if their pensions were slashed.

"Though this package falls short of what our retirees worked years to gain, under these circumstances with two major employers in bankruptcy we are pleased in what we were able to accomplish," Clark continued.  "This was the best we could get in a dreadful situation."

With the accord, New GM will honor its 1999 Benefit Guarantee and the 2007 tri-partite Memorandum of Understanding to ensure that eligible retirees at Delphi are made whole if the PBGC reduces their pensions.  Reductions could be made because the PBGC is not required to pay early retirement supplements or benefit increases made within the last five years.

The top-up also covers Delphi retirees in the process of growing into a pension benefit from a mutual retirement or the special pre-retirement package offered in the 2007 MOU.

GM had originally offered $417 million to provide health care coverage to eligible non-United Auto Worker pre-65 retirees and their dependents – and wanted to keep any unused money due to attrition for itself.  Union negotiators won an additional $50 million during the bargaining with GM and the U.S. Treasury, including a commitment that the entire amount will be spent on health care for union retirees.

The current health care plan, including dental and vision benefits, remains in effect for all current participants until Dec. 31, 2009.  Eligible pre-65 retirees will start to receive information on the cost of the modified-high deductible plan and forms to elect whether they want to take it in early fall.  IUE-CWA intends to offer a one-time buy-out option for those pre-65 retirees who opt not to take the plan.  Once retirees reach 65, and for those already over 65, GM-provided coverage will be eliminated.

Those over 65 or otherwise Medicare eligible could receive benefits or proceeds from a $1 billion claim that will remain against Motors Liquidation Co. in the bankruptcy court.  The amount and timing of any liquidation are impossible to estimate.  IUE-CWA will remain on the unsecured creditors' committee to maximize recovery for those retirees.

The $467 million and the $1 billion claim are monies that cover not just IUE-CWA retirees, but all of the union retirees who were excluded in the UAW-GM deal.

"We deliberately proceeded in these talks with a goal of being inclusive of those in other unions.  We believe we had a moral obligation not to leave those brothers and sisters out in the cold," said Clark.  "Whatever slim leverage we had, they had little or none.  Our talks were the only way to win some measure of health care coverage for those retirees."

Other union retirees who could receive health care benefits under the deal include the Electrical Workers, Operating Engineers, Machinists, Teamsters, Carpenters and Steelworkers.  The USW was a partner with IUE-CWA in the negotiations.

The agreement also provides $10,000 life insurance coverage that does not reduce with age.

Further, the agreement also provides that new GM will assume IUE-CWA Local 798's closing agreement for the Moraine Truck and Bus plant and fulfill obligations for buy-out payments.  In order to secure movement of the agreement to new GM, the company insisted that IUE-CWA accept the UAW concession to cut supplemental unemployment benefits in half the second year.

Clark stated that the union will continue to pressure the government to improve the health care coverage of the GM and Delphi retirees. 

"These workers earned high quality health care coverage and the government has now allowed for it to be taken away," he stated.  "There is nothing in this agreement that precludes the Treasury Department and the Obama Administration from recognizing the injustice they have caused and correcting the situation – either on their own or as directed through congressional action.  We will continue to pursue justice through every avenue available to us."