General Motors National Retiree
Association
Over
The Hill Car People,
LLC
Established 2003
Summary Of our Efforts To Assist GM Retirees
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Down The Page To Read Support From Congressional Leaders
Retirement USA Conference - GM National Retiree Association - OTHCP
Delphi Salaried Retirees Support Letter
GM 2010 Benefits Enrollment Period And Details - GM Conference Call
July 2009 - Auto Task Force Meeting Summary
GM National Retiree Association - Over The Hill Car People had its second meeting with the Auto Task Force in Washington, D. C. this week. The meeting was attended by the presidents of the retiree groups of Ford, Delphi, Chrysler and GM - Over The Hill Car People. Ron Bloom, Brian Deese and Matt Feltman of the Auto Task Force were present for the meeting in the U. S. Treasury Building. The retiree presidents reminded the Task Force members that we were a unique and distinct group of retirees deserving equitable treatment and consideration. While we don't represent all of the over 200,000 GM, Ford, Chrysler and Delphi salaried retirees affected by the auto industry crisis, our membership encompasses a very broad cross section of this group.
The retirees made a presentation outlining the sacrifices made by salaried retirees and asked that all retirees (salaried and union) be treated equitably in the auto industry restructuring efforts. We requested fair and equitable treatment for all GM, Chrysler, Ford and Delphi salaried retirees without regard to their status as hourly or salary retirees and all future modifications should also be equivalent. We asked that there be no further reductions in present benefits for GM and Chrysler salaried retirees while the Federal loans are outstanding. Numerous other benefit/pension topics were discussed including the bankruptcy of Ford's Visteon, and Delphi made a special plea for assistance with their dire situation. Delphi salaried retirees, as you will recall, have lost all health benefits, life insurance and their pensions have been turned over to the PBGC for administration. This will result in many Delphi retirees seeing pension reductions of 40% to 70%.
Mr. Bloom advised they had taken every factor into consideration with their efforts to bring GM and Chrysler out of bankruptcy as quickly as possible. He stated that President Obama's first priority was to make certain GM & Chrysler not only survived, but thrived as profitable companies. He stated this could not happen without sacrifices from everyone involved. We also emphasized that our first concern was the survival of the companies and the American auto industry as well. However, we did not feel that salaried retirees had received fair and equitable treatment during the restructuring. Mr. Bloom and the others understood our position, but advised that all actions taken by the Task Force were done to comply with the law/labor contracts in order to make the companies survive. He stated that all parties had to make the sacrifices required or GM & Chrysler would not only fail in bankruptcy, but would be required to liquidate. He reminded us that it could have been much worse for all retirees if the companies were allowed to fail.
Jack Dickinson asked Mr. Bloom what salaried retirees under the age of 65 could expect with regard to the 2/3 cuts in benefits to be announced this fall by GM. We were pleased to hear that these retirees will not receive a full 2/3's increase in co-pays, deductibles and premiums. He stated that this group of retirees had been given consideration and the full 2/3's cuts were not applied. Dickinson also questioned Bloom about the GM pension plan and was assured the pension plan was well funded and no plans were being considered to turn the GM pension plans over to the PBGC. Mr. Bloom was very complementary of GM's efforts with the management of their Salaried Retiree Program (pension plan). You may recall that GM has stated the pension plan will go to the new GM and was 95% funded as of December 2008.
Bloom advised that the best course of action for now would be to pursue a change of laws and introduction of legislation beneficial to all retirees. We advised him of our meetings with Congressional leaders while we were in Washington and he complemented our efforts in this area and encouraged continuation of this activity.
We did visit in the offices of several Congressional leaders and their representatives while we were in Washington and we encourage you to write your Congressional leaders requesting their support for salaried retirees.
Christopher J. Lee (R) - Congressman From New York
Brain Schubert - Chief of Staff
Elizabeth Mortenson - Legislative Assistant
Sherrod Brown - Senator From Ohio
Moria Lenehan-Razzuri - Legislative Assistant
Timothy P. O'Toole - Pension Specialist Attorney
Anthony F. Shelley - Pension Specialist Attorney
A few of the areas of concern we discussed with the above professionals are listed below:
Please support our efforts working with the Congress to:
Extend Health Coverage Tax Credit (HCTC) eligibility to all retirees who lose employer subsidized health insurance without the requirement for their Pension to Default to the PBGC
Enact or revise laws that prevent the loss of Health Care Insurance, Life Insurance and Pensions
Give health Insurance and pensions priority status in bankruptcy
Eliminate the ability of employers to unilaterally insert “Right to Terminate” clauses into corporate OPEB benefit plan documents
Close loopholes that allow the use of qualified pension plan monies to Pay for “Non-Pension” Expenditures. - i.e. Severance Payments, Early Retirement Supplements and Buy Outs
Our message requested urgent and immediate legislative actions to correct the obvious deficiencies in the current laws that govern the protection of Salaried Retirees! We expressed our appreciation to these Senators/Representatives for their advice and for writing letters of support to President Obama and the Auto Task Force concerning our request for the salaried retiree groups to meet with the Auto Task Force. Please consider writing these Congressional Leaders to thank them for supporting you!
Regards,
Jack
Dickinson, President
Over The Hill Car People, LLC
General Motors National Retiree Association
www.overthehillcarpeople.com
Minutes Of the GM Conference Call - June 1, 2009
"The National Automotive Coalition" (TNAC) - Update
We believe the proactive work done by “The National Automotive Coalition” (TNAC) with the presidents of the salaried retiree groups of Chrysler NCRO, Ford Fair Alliance, Delphi DSRA and GM OTHCP had some influence with the decisions Chrysler and GM made concerning salaried retiree benefits during their respective bankruptcy proceedings. TNAC, you may recall, met with the Auto Task Force, followed by visits to the offices of key Senators and representatives in Washington, and a conference call with Governor Granholm and her assistants in April 2009, to get the voices of salaried retirees recognized. TNAC believes this was the first time the salaried retirees had been recognized in Washington or anywhere for that matter. The details of our efforts can be viewed at this link http://www.overthehillcarpeople.com/autotaskforcemeetingminutes.htm . We now know more benefit reductions were probably planned, but our united voices and presence, in many opinions, were deciding factors in Chrysler and probably GM and the U. S. Treasury decisions to not make additional reductions in salaried retiree benefits. As much as we disagree with our hard earned losses, we know it could have been much worse. We also believe more action by TNAC with Congressional and State Leaders is a must, and we have already requested another meeting with the Auto Task Force in Washington to discuss salaried retiree issues. The Auto Task Force has acknowledged our request and we hope to have a date soon. As you probably know, Delphi salaried retirees lost all of their health and life benefits and their pensions are in danger of being administered by the PBGC, which would mean 40% to 50% cuts in pension payments for many. TNAC was successful in aiding Delphi to gain a meeting with Dr. Ed Montgomery of the Auto Task Force, and this will occur on Monday, June 29, 2009.
Changing laws and introducing new legislation is a necessary action but is also a slow grinding process. The team effort of TNAC has proven to be a faster means of gaining attention for the salaried retiree concerns. The National Automotive Coalition is currently involved in some specific projects with the objective of improving the status of the salaried retiree and has others under consideration as well. The retiree groups of GM Over The Hill Car People, Ford Fair Alliance, Chrysler NCRO, and Delphi DSRA already have many of their members working on a committee to advance the issues of the salaried retiree, and we hope to make additional announcements of our progress soon. We intend to continue to spend our efforts with a proven group of retiree presidents on behalf of salaried retirees. You can help by writing your Congressional & Local Leaders requesting them to grant a meeting with "The National Automotive Coalition" (TNAC). Please click here to find the e-mail & fax information for your political leaders:
My Elected OfficialsFind and contact your federal, state, and local officials click below: |
Click Below To View:
Kokomo Tribune News Article About The National Automotive Coalition - May 16, 2009
May 11, 2009
Over
The Hill Car People Fox Business News Interview - May 11, 2009
May 6, 2009
Minutes Of the GM Conference Call - May 4, 2009
http://overthehillcarpeople.com/minutesofgmconferencecall050409.htm
Minutes of the conference call with Governor Jennifer Granholm of Michigan - April 29, 2009
http://overthehillcarpeople.com/governorgranholmconferencecall042909.htm
April 24, 2009
Summary of our Meeting in Washington with the Auto Task Force
Hello to the members of Over The Hill Car People, LLC - General Motors National Retiree Association and all GM retirees!
http://overthehillcarpeople.com/autotaskforcemeetingminutes.htm
k Force Bloomberg TV Interview With Jack Dickinson - GM Retiree & Chuck Austin - Chrysler Retiree
The Obama administration plans to talk with the leaders of a group representing 200,000 salaried retirees at Detroit's Big Three automakers this week -- as crucial deadlines loom for Chrysler LLC and General Motors Corp.
An administration official said Sunday that it wasn't clear if the meeting would occur in person in Washington or by phone but that the Obama auto task force wanted to hear the concerns of salaried retirees. No date has been set for the discussion -- expected to take place this week.
Retirees are deeply worried about the fate of their pensions, supplemental payments and health care benefits in the event that either GM or Chrysler files for bankruptcy. The Obama auto task force has said bankruptcy may be "the best option" for both companies to restructure their balance sheets.
Salaried retirees have little protection compared with hourly retirees. At Delphi Corp. -- which has been in bankruptcy since 2005 -- the company recently eliminated health care and life insurance benefits for salaried retirees, saving $70 million annually.
Chrysler must complete a tie-up with Italian automaker Fiat S.p.A by April 30 and show how the alliance would be profitable. The Obama administration has offered up to $6 billion in loans to the joint venture -- and the government would have a role in selecting the new board of directors of Chrysler.
Last week, Chuck Austin, president of the National Chrysler Retirement Organization, complained that they had sought a meeting with the Obama auto task force but gotten no response."If they don't met with us, it will be historic," Austin told The Detroit News. "It will mean they considered every stakeholder in the company except one group."
GM faces a June 1 deadline to win tougher concessions. It plans to detail its new restructuring before the end of the month as part of its bond exchange offer due by April 27. GM needs to cut its $28 billion in unsecured debt by at least two-thirds.
The Obama auto task force also plans another meeting this week with auto dealers, including the head of the National Automobile Dealers Association.
The group is awaiting confirmation of the meeting with the autos task force and could learn more Monday, said Jack Dickinson, president of the General Motors National Retiree Association, which operates the Web site www.overthehillcarpeople.com.
"We have got to impress upon them that there are a few hundred thousand salaried retirees out there that really have not been to the table, and have not been represented at any of the restructuring meetings or involved in any of the restructuring plans" Dickinson said Sunday.
Monday, April 20,
2009, 2:33pm EDT | Modified: Monday, April 20, 2009, 3:00pm
Salaried retirees,
Obama auto reps to meet
Business First of Buffalo - by Thomas Hartley
Representatives of about 200,000 salaried retirees of the Detroit automakers
and Delphi Corp. are tentatively scheduled to meet Friday in Washington with
the Obama administration’s auto task force.
Included in the group is Den Black, interim chair of the Delphi Salaried
Retiree Association (DSRA), and a former chief engineer at Delphi Thermal
Systems in Lockport.
The meeting is part of an effort by white-collar retirees to press their
case for preserving their retirement benefits as the auto industry undergoes
reorganization and downsizing.
Unlike union workers and retirees, salaried workers say they are vulnerable
during restructuring because their benefits are not protected by contracts.
Companies often can change terms without consulting their former employees,
as Delphi did recently in dropping company-paid health and life insurance
coverage for salaried retirees.
James Frost of Clarence, a retired 31-year employee of GM and Delphi, said
for Friday’s meeting, each retiree group from General Motors Corp., Ford
Motor Co., Chrysler LLC and Delphi has been allotted two representatives.
“Den Black is one for sure. The other is being determined at this time,”
said Frost, a former Lockport site manager, and interim member at large on
the DSRA board.
http://www.bizjournals.com/buffalo/stories/2009/04/20/daily15.html
April 16, 2009
The Honorable Timothy F. Geithner
Secretary of the Treasury
U.S. Department of the Treasury
1500 Pennsylvania Ave., NW
Washington, DC 20220
Dear Mr. Secretary,
I understand that the Presidents of the Chrysler, Ford, GM and Delphi salaried non-union retirement organizations have requested a meeting with the Auto Task Force.
These organizations represent more than 200,000 salaried non-union retirees in the automobile industry, all of who have a very significant interest in the future viability of the U.S. domestic auto industry. I would please ask that you grant the request from the salaried non-union organizations to meet with the Auto Task Force to discuss future pension benefit concerns.
Thank you in advance for your timely consideration in this matter.
Sincerely,
_______________________
Tim Ryan
Member of Congress
April 16, 2009
Tribune Chronicle
POSTED: April 16, 2009
WARREN Salaried retirees from Delphi Packard Electric could get a chance to air worries about the safety of their pensions before President Obama's auto task force, a top elected official said this morning.
"We'll work to get them a meeting with the task force," U.S. Rep. Tim Ryan, D-Niles, said after addressing a packed room at the Sunrise Inn in downtown Warren, where the retirees hold regular meetings.
Ryan also asked the group to form a committee to list their chief concerns, saying he and other elected officials then will offer suggestions as legislation in the House of Representatives.
Local retirees are working with their Delphi counterparts around the country, along with those from automakers General Motors Corp., Ford and Chrysler, to meet with the auto task force, which is working to restructure the nation's auto industry.
The retirees are among an estimated 15,000 who face paying for their own health care after auto parts maker Delphi Corp. received bankruptcy court permission in March to terminate their coverage on April 1.
The company later settled with the retirees to put up $8.75 million in monthly subsidy payments to the group to Nov. 1 that would be used to help cover the retirees' health care and life insurance costs.
http://www.tribtoday.com/page/content.detail/id/520761.html


General Motors National
Retiree Association
OverTheHillCarPeople.Com
LETTER TO U.S. AUTOMOTIVE TASK FORCE ASKS FOR EQUAL TIME FOR
SALARIED RETIREES OF GM, DELPHI, CHRYSLER, AND FORD
The leadership of Chrysler, Ford, GM and Delphi retiree organizations are requesting that President Obama’s Automotive Task Force give them the opportunity to lay out their concerns regarding government restructuring efforts for the U.S. Automobile industry. The four groups have united their efforts in light of recent actions the companies have taken to severely modify, reduce or terminate healthcare and life insurance benefits. The retirees are asking for restoration of their benefits as part of the restructuring of the companies.
The letter below has been sent to Treasury Secretary Timothy Geithner and National Economic Council Director, Larry Summers.
March 24, 2009
Mr.
Timothy Geithner, Treasury Secretary
Department of the Treasury
1500
Pennsylvania Avenue, NW
Washington, D.C. 20220
Mr.
Larry Summers, Director
National Economic Council
1600 Pennsylvania Ave NW
Washington, DC
20500
Dear Mr. Geithner and Mr. Summers:
First, let us introduce ourselves. We are the Presidents of the Chrysler, Ford, GM, and Delphi, salaried non-union retirement organizations. As a point of information there are more than 200,000 salaried non-union retirees in the automobile industry. Our members include administrative, clerical, professional and executive retirees. As you know, the number of retirees is growing rapidly and approximately 50% of our nation is now over the age of fifty. A large number of future retirees will be non-union. However because salaried retirees are not unionized and are loosely affiliated, their concerns go unheard.
To better understand our perspective you must realize that, just like their union counterparts, non-union workers contributed greatly to building our economy and this nation. We worked countless hours of overtime, often without compensation, helping to strengthen and build our companies. We earned our pay and benefits over the years sacrificing our time and our family life in the belief that we would be able to have a secure retirement for ourselves and our families. We were promised a secure retirement by our companies. However, they have not kept their promises. In the past few years, the trend to reduce the benefits of non-union employees and particularly retirees has increased dramatically. Since 2006, the Detroit 3 (Chrysler, Ford and GM) have reduced or eliminated life insurance, have terminated healthcare insurance for non-union retirees on Medicare and have instituted cost sharing provisions far in excess of those imposed upon union represented employees and retirees. Further, Delphi, a major automotive supplier, recently eliminated health insurance and early retirement benefits for all of its non-union retirees as a condition of its bankruptcy restructuring.
It is evident non-union retirees are facing an economic tsunami. Our investments have been devastated by a precipitous drop in the stock market and employers are abandoning non-union retirees by eliminating as many benefit programs as possible for cost cutting purposes. As a consequence, non-union retirees face rising medical costs on fixed incomes and devastated savings. In addition non-union retirees face an uncertain future relative to their pensions. The domestic automobile industry is in the midst of a massive restructuring and needs federal loans to stay solvent. Consequently, not only the survival of the companies is at risk but also the pensions of all retirees.
We recognize that legislative action will ultimately be required in order to truly protect the pensions and benefits of retirees. Our retiree organizations are pursuing this objective in partnership with the National Retirees Legislative Network and other retiree advocacy groups. However, non-union retirees in the auto industry cannot wait. GM and Chrysler are seeking government loans to avoid bankruptcy and Delphi is already in bankruptcy. Further, there are a long string of automotive suppliers approaching bankruptcy, many of whom are also seeking federal loans. It is clear the Treasury Department and the Automotive Task Force have concluded that the domestic automobile industry needs significant restructuring in order to be competitive with foreign automakers. Policies and procedures are being implemented to address the competitiveness issue.
We believe any policies and procedures put in place should represent equality of sacrifice. However, it is clear that non-union retirees have given up far more of their benefits and security than the any other group. All retirees should be treated fairly which is why we believe the concerns of non-union retirees need to be addressed as part of any restructuring efforts with GM and Chrysler as well as with any restructuring efforts associated with Delphi’s bankruptcy.
Non-union retirees are not seeking a lucrative benefit package but rather only that our economic fate is secure in retirement through basic protection that insures the safety of our pensions and provides decent health care and life insurance protection for ourselves and our families.
Non-union retirees are especially concerned that:
Such action by the Treasury Department and the Auto Task Force will not only help non-union retirees from the Detroit 3 but it will also set the precedent for subsequent automotive suppliers that seek federal funds or file for bankruptcy.
The Task force has met with all the GM and Chrysler stakeholders including union represented employees/retirees but has not seen fit, as yet, to meet with non-union retiree representatives. Consequently, we do not believe the concerns of non-union retirees have been addressed. Therefore, we request that we be permitted to meet with the Task force so that we can address these concerns in more detail. Thank you for your consideration in this matter.
Sincerely,
Chuck
Austin, President
National Chrysler Retirement Organization
2809 Walmsley Circle Dr.
Lake Orion, MI 48360
E-mail:
chuckaustin@comcast.net
Don
Whitehouse, President
FAIR Alliance Inc. (Ford Actions Impacting Retirees)
1205 Stagecoach Rd, Madisonville, KY 42431
E-mail:
donlwhitehouse@aol.com
Den
Black, Interim Chair
DSRA (Delphi)
416 Willow Brook Way
Chesapeake, VA
23320-3560
E-mail:
denblack@cox.net
Jack
Dickinson, President
Overthehillcarpeople
General Motors National Retiree Group - OTHCP
5184 Caldwell Mill Road
Hoover, Alabama 35244
E-Mail:
spoacdc1@aol.com
www.overthehillcarpeople.com
*******My purpose in co-authoring the letter to the Auto Task Force, along with the Delphi, Chrysler and Ford groups, was to bring to light the sacrifices the GM salaried retirees have already made. For most of our retirees 65 years of age and up, the health benefits were terminated effective January 1, 2009. Most media coverage of the plight of the American auto industry appeared to indicate that no health benefits had been lost. This may be true for the hourly retirees but not for the salaried retirees. It was our goal to highlight this distinction to the Auto Task Force and to ask that the salaried retirees be given the same opportunities/considerations as have been given to the hourly retirees.
In no way do I claim to have any authority to bargain or represent the salaried retiree other than to present the known facts about how the decisions have affected me as a GM salaried retiree above the age of 65 or others who were willing to share their stories.
The main goal was to have the Auto Task Force recognize the salaried retiree and to ask the Auto Task Force to help us to find ways to change the public’s perception of the American OWNED Auto Industry, so that people would continue to buy our vehicles. We not only want our companies to survive but, also, to thrive and it is our feeling that this was a way we could help save our companies and our benefits.
White-collar retirees of the Big Three auto makers and supplier Delphi Corp. are banding together in hopes of preserving their benefits and pensions.
Representatives of more than 200,000 salaried retirees from General Motors Corp., Chrysler LLC, Ford Motor Co. and Delphi this week plan to renew a push for a meeting with the Obama administration's auto task force.
Retirees at GM and Chrysler fear they could be stripped of many benefits in the government-led reorganization of those two companies. In March, Delphi, which has been stuck in bankruptcy protection for more than three years, cut the health-care benefits of its salaried retirees.
"We do have a vision of what happens...because Delphi has gone through it," said Michael Kane, a spokesman for the National Chrysler Retirement Organization. "So we're not just raising our arms saying 'we're frightened.' "
Salaried retirees are among the most vulnerable groups in restructurings and bankruptcies because they typically aren't represented by unions, and companies are generally free to slash their retirement packages.
Representatives of salaried retirees from GM, Chrysler, Ford and Delphi are scheduled to discuss ways of protecting their retirement packages in a conference call on Friday, members of the groups said.
Under the government's direction, GM and Chrysler could follow Delphi into bankruptcy court. GM has until June 1 to work out new labor terms with the United Auto Workers union and a debt-reduction agreement with its bondholders. Chrysler has only until May 1.
Salaried retiree groups have asked to meet with the auto task force but haven't yet been granted a meeting.
Over the years, GM has increased the share retirees must pay for their health care and, starting this year, GM eliminated medical coverage for retirees and dependents older than 65, who are eligible for Medicare. In lieu of company-funded benefits, GM gives these retirees a "medical expense credit" to help offset additional costs.
"We have been neglected," said Jack Dickinson, president of the GM National Retiree Association who also runs a Web site www.overthehillcarpeople.com for GM retirees.
The white-collar retirees typically pay a larger share of their medical benefits than their hourly counterparts, but still have generous benefits relative to the overall work force.
GM's salaried retirees for years have seen increases in their premiums and co-pays as the auto maker raced to slash its crushing health-care burden.
The groups formally joined forces late last month to make sure their concerns are heard. In a letter to Treasury Secretary Timothy Geithner and National Economic Council Director Larry Summers, dated March 24, the groups argued that, "just like their union counterparts, nonunion workers contributed greatly to building our economy and this nation."
On Wednesday, Sen. Sherrod Brown (D., Ohio) wrote a letter on behalf of the groups to Mr. Geithner. Sen. Carl Levin (D., Mich.) sent a similar letter earlier this month.
The groups' biggest problem is that they have few bargaining chips. Unlike the UAW, salaried retirees aren't locked into labor contracts requiring protracted negotiations. Instead, their contracts often include clauses that allowed benefits to be cut. "We're the people who invented the stuff, built the stuff, designed the stuff," said Dennis Black, interim chairperson at Delphi Salaried Retirees Association. "But we're not represented."
Write to Sharon Terlep at sharon.terlep@dowjones.com
http://online.wsj.com/article/SB123992739229927517.html
Updated: 04/12/09 07:18 AM
By Holly Rosenkrantz - BLOOMBERG NEWS
Den Black, a retired General Motors Corp. engineering executive, says he’s worried and angry. The government- supported automaker is going bankrupt, he says, and he’s sure some of his retirement pay will go down with it.
“This is going to wreck us,” said Black, 62, speaking of GM retirees. “These pledges from our companies are now garbage.”
As the biggest U. S. automaker teeters near bankruptcy, workers and retirees like Black are bracing for what may be $16 billion in pension losses if the Pension Benefit Guaranty Corp. has to take over the plans, according to the agency.
As many as half of GM’s 670,000 pension-plan participants might see their benefits trimmed if that happened, an actuary familiar with the company’s retirement programs estimates.
The possibility that GM might dump its pension obligations is likely to intensify debate over the treatment of executives of companies that receive U. S. aid. GM Chief Executive Officer Rick Wagoner, ousted by the Obama administration last month, may receive $20.2 million in pensions, according to a regulatory filing.
“The core issue is fairness,” said Harley Shaiken, a labor professor at the University of California at Berkeley. “To have workers lose a significant amount of their pension after giving a lifetime to building a company is devastating under any circumstance. It’s made all the more worse by the symbolism of a $20 million payoff at the top.”
Measured by participants, GM’s pension plan would be the largest taken over by the PBGC, a quasi-government corporation created by Congress in 1974 to protect pension programs of bankrupt companies.
Dealing with pensions may be one of the thorniest issues facing President Obama in a GM bankruptcy. Unions including the United Auto Workers rallied behind his candidacy, spending $52 million to help elect him last year, according to Washington-based Open- Secrets.org, which tracks campaign spending.
“It’s going to be a very political decision,” said John Casesa, who follows the auto industry as managing partner of Casesa Shapiro Group, a New York consulting firm. “I’m not really sure how this will go.”
GM’s pension system had a $20 billion shortfall as of Nov. 30, 2008, based on numbers the company provided the PBGC, said Jeffrey Speicher, a PBGC spokesman. By law, the agency would be able to make up only $4 billion of that, he said.
“The rest would be lost,” Speicher said.
Current and future retirees of Chrysler LLC, the other U. S. automaker on life support, would forgo $7.1 billion, Speicher said. Chrysler’s plan is underfunded by $9.3 billion, and the agency would cover $2.2 billion, he said.
Chrysler’s plan, with 250,000 members, would be the second-largest taken over by the PBGC. The biggest to date was the 120,000-member United Airlines plan, absorbed by the PBGC in 2005. The agency had an $11.2 billion deficit itself as of Dec. 31.
The $16 billion that would be lost by GM workers and retirees is a “big deal,” said Frank Todisco, senior pension fellow at the American Academy of Actuaries in Washington. “That’s a significant haircut on one’s benefits.”
The maximum amount that PBGC can pay retirees 65 or older is $54,000 a year. They would lose anything they get over that amount. Beneficiaries under 62 would be likely to lose a supplement of $15,000 to $18,000 paid by the GM plans to bring pensions up to $36,000 annually, according to the actuary with knowledge of the plans, who declined to be identified discussing potential cuts.
GM declined to disclose pension benefits or discuss what might happen to them should it file for bankruptcy.
“We won’t speculate on the matter,” said Renee Rashid-Merem, a spokeswoman for Detroit-based GM, which has received $13.4 billion in U. S. aid and asked for as much as $16.6 billion more.
Obama on March 30 gave GM until June 1 to come up with deeper cuts in debt and labor costs than proposed by Wagoner to avert bankruptcy. He gave Chrysler until May 1 to form an alliance with Italy’s Fiat SpA.
“Our goal, of course, is to do everything realistic to protect workers and their pensions,” said White House spokesman Bill Burton.
“We expect Chrysler’s pension plans to be nearly fully funded and have ample liquidity to continue benefit payments as required,” said Michael Palese, a spokesman for the Auburn Hills, Michigan-based company.
Christine Moroski, a United Auto Workers spokeswoman, declined to comment.
Black, the former engineering executive, says he worked at GM for 34 years and for two years at Delphi Corp., the bankrupt auto-parts supplier formerly owned by the automaker.
“If GM loses the pensions, it would mean 25 percent of my source of income would evaporate,” said Black, who declined to say what his retirement pay is. “I would have to go back to work.”
Returning to work may not be an option for other GM retirees, Black said. “I’ve talked to lots of folks who would be devastated,” he said.
Not all companies that go bankrupt dump their pension obligations, said Speicher, the PBGC spokesman. Northwest Airlines Corp. emerged from bankruptcy in 2007 without terminating its plans, he said.
GM’s plan also is in relatively better shape than others, because it’s about 87 percent-funded, according to the actuary, compared with the typical pension plan’s 60 percent to 70 percent funding.
“The question of whether GM’s pension obligations are too great to allow it to operate effectively is a complicated one, and far from obvious,” said Andrew Oringer, an employee-benefits lawyer at White & Case LLP in New York.
“Nobody really knows” what would happen with GM pensions in a bankruptcy, said Jack Dickinson, president of an advocacy group for GM retirees called Over the Hill Car People.
The “PBGC doesn’t want to touch it, they’ve got their own problems,” said Dickinson, 65, who worked for 34 years in sales and management at GM. “We’re just hoping they take a hands-off approach. We depend on that money; We earned it, and it’s part of our compensation.”
Find this article at:
http://www.buffalonews.com/145/story/637456.html
WASHINGTON -- A group of automotive salaried retirees wants the Obama Administration's auto task force to hear its views.
The presidents of the General Motors Corp., Ford Motor Co., Chrysler LLC and Delphi Corp. salaried retirees associations sent a letter Tuesday to the co-chairs of the Obama auto task force, Treasury Secretary Tim Geithner and National Economic Council director Larry Summers, urging them to heed the needs of more than 200,000 automotive industry salaried retirees.
"You must realize that, just like their union counterparts, non-union workers contributed greatly to building our economy and this nation. We worked countless hours of overtime, often without compensation, helping to strengthen and build our companies. We earned our pay and benefits over the years sacrificing our time and our family life in the belief that we would be able to have a secure retirement for ourselves and our families," the letter says.
"We were promised a secure retirement by our companies. However, they have not kept their promises. In the past few years, the trend to reduce the benefits of non-union employees and particularly retirees has increased dramatically. Since 2006, the Detroit 3 (Chrysler, Ford and GM) have reduced or eliminated life insurance, have terminated health care insurance for non-union retirees on Medicare and have instituted cost-sharing provisions far in excess of those imposed upon union represented employees and retirees."
The letter noted that Delphi Corp. recently won permission to eliminate health insurance and life insurance for about 15,000 salaried retirees starting April 1. Delphi's retirees have sought to block the move in court, which will save the company more than $70 million annually and reduce the company's long-term liability by $1.2 billion.
Chuck Austin, president of the National Chrysler Retirement Organization, said all they were requesting was to be heard.
"Salaried retirees have been ignored in all of the discussions. We've already given up too much, and they should be fair," said Austin, 67, of Lake Orion, who retired from DaimlerChrysler in 2004 after 40 years with the automaker.
The Treasury Department didn't immediately respond to a request for comment.
You can reach David Shepardson at (202) 662-8735 or dshepardson@detnews.com.
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Salaried
auto retirees push for benefits
Meeting sought with auto panel
BY JUSTIN HYDE
FREE PRESS WASHINGTON STAFF -
March 26, 2009
WASHINGTON -- A coalition of salaried retirees from Detroit automakers and Delphi Corp. asked Wednesday to meet with President Barack Obama's auto task force, saying the firms should be required to preserve benefits for white-collar retirees as part of any rescue.
Salaried retirees have faced several cuts in recent years as the companies slashed costs, while benefits of hourly retirees are protected by UAW contracts. Last year, General Motors Corp. said it would end regular health care benefits for 97,000 white-collar retirees, saying they would have to use a combination of Medicare (when they become eligible at age 65) and a supplemental insurance plan instead.
In a letter to Treasury Secretary Tim Geithner and National Economic Council director Larry Summers, the groups say the task force should set aside money to help pay for the benefits of 200,000 white-collar retirees, require the companies to maintain health care and shore up pension plans.
"We believe any policies and procedures put in place should represent equality of sacrifice," the letter said. "However, it is clear that nonunion retirees have given up far more of their benefits and security than any other group."
The request was sent by four groups representing white-collar retirees at GM, Ford Motor Co., Chrysler LLC and Delphi.
The UAW has agreed to changes in its contract with current workers, and to take stock instead of cash for its retiree health care trust fund, raising the risks that the trusts could run low of money in the future and be forced to cut benefits. The union has resisted calls to reduce the benefits hourly retirees receive.
The administration is expected to unveil a framework for additional aid to GM and Chrysler within days.
Contact JUSTIN HYDE at 202-906-8204 or jhyde@freepress.com.
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