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Care plan splits auto retirees

Car companies and the UAW want former workers to pay for part of their health benefits.

DETROIT - Retired autoworkers who spent decades together on assembly lines and picket lines find themselves facing off in a dispute over health benefits.

Some believe General Motors Corp., Ford Motor Co. and the United Auto Workers are breaking their promises by requiring retirees to pay several hundred dollars more each year for their health care.

Other retirees, however, have voiced support for what they see as necessary steps to stem the automakers' staggering losses.

"They've got to do something and the way things are going, it's about the only thing they can do," said William Hutchinson, 83, of St. Petersburg. He retired 29 years ago as a diemaker in GM's Buick division.

Hutchinson said retiree health benefits have been a big help at a difficult time. "My wife just went through open heart surgery, and it's going to end up costing pretty close to $100,000. Somebody's paying those bills."

Under the proposed agreements, GM and Ford hourly retirees would pay deductibles, premiums and co-payments for the first time, up to $752 annually for families and $370 for individuals. Those amounts could rise in the next few years depending on the amount of money in two new trust funds that will be used to reduce payments.

The agreements require active hourly workers to contribute a percentage of future pay increases to the trust funds. GM says it will put $3-billion into its fund by 2011, while Ford says it will contribute $108-million in the same time period. DaimlerChrysler AG's Chrysler Group is seeking a similar deal with the UAW.

Active workers at GM and Ford already have approved the settlements, but the automakers need federal court approval before they can take effect. U.S. District Judge Robert Cleland considered objections from GM retirees last week and is expected to rule on GM's agreement later this month. Judge Arthur Tarnow will consider objections from Ford retirees at a hearing scheduled for May 31.

"It kind of upsets me that they're playing a shell game and they're only giving the information they want to give," said Larry Bronson, 70, who worked at Ford's historic Rouge complex for 42 years until he retired in 1998.

Bronson plans to attend the Ford hearing to voice his frustration. "I'm going to have to do without to make those payments," said Bronson, of Lapeer, Mich., whose Ford pension totals $20,000 a year.

But so far, it appears relatively few retirees share Bronson's opinion. Out of the 476,000 GM retirees and dependents who received notices about the changes, just 1,250 filed objections that could help persuade the judge to reject the settlement. Ford began sending out notices to 150,000 retirees and their dependents last week and Ford retirees have until April 28 to file an objection.

Bonnie Lauria, 64, a GM retiree from West Branch, Mich., says most retirees support the agreements because they feel they've been fortunate to have generous benefits for so long. Lauria worked for GM for 28 years before retiring in 2000, and she also has an annual pension of $20,000. Lauria's son, a GM millwright, was one of the active workers who approved the agreement.

"Let's face it. Nobody likes to pay extra for anything they've been getting, be it gasoline or milk," Lauria said. "But if you look at the alternative, having no insurance at all, I think it's a very small price to pay."

Others say plenty of people opposed GM's agreement but didn't know they had a right to object because the 80-page explanation sent to them was written in confusing legal language.

Lawyer Mark Baumkel, who represents GM and Ford retirees opposing the agreements, said he got calls from hundreds of GM retirees who didn't realize they could object until too late in the process. Baumkel said it's important for retirees to understand their rights because if the settlement is approved, they won't have the ability to opt out and sue on their own.

But William Payne, an attorney for retirees who support the agreement, said retirees got a brochure with highlights of the changes and at least 500 people called a toll-free number to ask questions. Local UAW leaders also held meetings to explain the changes.

Lauria said few retirees complained at the meetings she attended. She said they know GM needs help because they pass shuttered plants every day.

"Once they understood that GM was in trouble and we could all be in trouble, they said that they didn't want to pay but they'll pay," she said.

Bronson says he hopes longtime UAW members won't be afraid to challenge their union.

"We used to be pioneers in all this stuff," Bronson said. "Everybody I talk to feels like we've been sold out."

Times staff writer Helen Huntley contributed to this report.

[Last modified March 18, 2006, 02:30:29]